WEEKLY NEWS WRAP-UP

VOLUME 7

Week 34 (August 18, 2008 –August 122, 2008)

This Week’s Focus:

1. Insurance Market

2. Reinsurance

3. Management Liability

4. Markets and Producers

Insurance Market

Fewer new insurers, reinsurers formed in Bermuda. Ten new insurance and reinsurance companies were formed in Bermuda during the first quarter of 2008, a decline from the same period in 2007, according to the Bermuda Monetary Authority's latest regulatory update. During the same period a year ago, the Bermuda regulator registered 13 new insurance and reinsurance companies. In the fourth quarter of 2007, it licensed 21 new companies. The BMA said the number of formations reflect the soft market conditions that currently exist worldwide. (Source: Bermuda Sees Decrease in Number of New Reinsurers, Insurers, BestWire, 08/20/2008)

European insurers on prowl for new acquisitions. Europen insurers remain on the hunt for small to midsize acquisitions, with the action likely to center on promising emerging markets. Larger deals in mature markets will likely have to wait in the face of the global credit turmoil. Heavyweights such as AXA SA of France, Assicurazioni Generali SpA of Italy and Zurich Financial Services AG of Switzerland are seeking buying opportunities in emerging markets to offset slowdowns in domestic premium growth. (Source: European Insurers Remain On The Prowl, Wall Street Journal, 08/20/2008)

Insurers escape worst of credit crunch. The insurance industry's ability to sniff out bad risk saved it from the worst of the credit crunch, according to Robert Hiscox, chairman of Lloyd's underwriter Hiscox. Hiscox said there has been less damage than expected. Source: Insurers 'escape' the crunch, The Express, 08/19/2008)

Reinsurance

Aon to buy Benfield. Aon Corp. announced it will acquire U.K. reinsurance broker Benfield Group Ltd. for GBP844 million. The agreed deal is worth 350 pence a share and represents a 29% premium to Benfield's closing share price on Thursday at 271 pence. In a statement, Aon said that Benfield will be integrated with Aon's existing reinsurance business, Aon Re Global, and will operate under the newly created Aon Benfield Re brand. (Source: US Aon Corp To Buy UK Benfield Group For GBP844M, Dow Jones, 08/22/2008)

Management Liability

NY AG turns up pressure on auction rate settlements New York Attorney General Andrew Cuomo's office is stepping up its probe of three banks-- Bank of America Corp., Goldman Sachs Group Inc. and Deutsche Bank AG -- that sold auction-rate securities and haven't settled with regulators. The market collapsed in February when Wall Street firms stopped supporting it with their own bids, leaving customers unable to cash out. Cuomo's office has been gathering more documents, conducting witness interviews and assigning more lawyers to investigate the companies' auction-rate operations. (Source: Pressure Rises To Settle On Auction-Rates, The Wall Street Journal, 08/20/2008)

Markets and Producers

Marsh¹… Marsh & McLennan Cos. said Vanessa A. Wittman will succeed Matthew B. Bartley as its new chief financial officer.

Arthur J. Gallagher² … Arthur J. Gallagher & Co. has acquired insurance broker Wm. W. George & Associates, Inc.

Allianz³ … Departing Alabama Insurance Commissioner Walter A. Bell will join Swiss Re America Holding Corp. as chairman, effective Sept. 2.

Sources:

1. “Marsh Names Adelphia Vet Wittman To Succeed CFO Bartley,” Dow Jones, 08/21/2008

2. “Arthur J. Gallagher Buys Wm. W. George,” InvesTrend, 08/19/2008

3. “Swiss Re Taps Alabama's Bell to Chair Americas Operation,” BestWire, 08/19/2008

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