A.M. Best Report: Reinsurers Humbled, but Most Not Broken, by Hurricane Losses.OLDWICK, N.J. -- Almost a year after three massive hurricanes--Katrina, Rita and Wilma--the global reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. industry is still struggling to manage its catastrophe exposure, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. A.M. Best Co.'s 2006 global reinsurance report, "Reinsurers Humbled, But Most Not Broken, By Hurricane Losses." The impact of the U.S. hurricanes reverberated worldwide. Reinsurers absorbed 60 percent of the record insured property losses. Bermuda- and U.S-based companies have borne the brunt so far, at $11 billion and $7 billion, respectively. Ultimate costs may not be known for some time. The 28-page report notes that the underlying stability of the current reinsurance market remains tenuous, even though most reinsurers are financially positioned to meet their claim obligations. Since the 2005 hurricanes, the financial-strength ratings of 13 U.S. and Bermuda reinsurers have been downgraded or withdrawn after being downgraded, as of July 31, 2006. Hurricane losses were a factor in each of these actions. Four Bermuda-based companies also have been placed in run-off. The new report includes A.M. Best's annual ranking of the Top 35 Global Reinsurance Groups based on gross written reinsurance premiums for 2005. Based on 2005 data, Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. , Swiss Re Swiss Re is the world’s largest reinsurer, now that it has acquired GE Insurance Solutions (Ligi 2006). Founded in 1863, Swiss Re now operates in more than 30 countries. General Electric owns 8.9% of the firm. Group, Berkshire Hathaway Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) is a conglomerate holding company headquartered in Omaha, Nebraska, U.S., that oversees and manages a number of subsidiary companies. Group, Hannover Re and Lloyd's of London Not to be confused with Lloyds Bank or Lloyd's Register. Lloyd's of London is a British insurance market. It serves as a meeting place where multiple financial backers or “members”, whether individuals (traditionally known as lead the world. However, Swiss Re has since closed on its purchase of GE Insurance Solutions, which should help it reach the top when 2006 premiums are reported. Reinsurers are bracing for a long period of heightened catastrophe risk. The report details the rapid growth in securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. and catastrophe bonds as reinsurers look to the capital markets to strengthen their balance sheets. Based on current trends, it appears that the reinsurance industry will become an even more capital-intensive business than it has been traditionally. An excerpt from the report, which includes a video, is available at www.bestweek.com. BestWeek subscribers can download a PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com. Nonsubscribers can download a PDF copy of the full special report (28 pages) for $85 or a combination of the PDF copy plus the spreadsheet file of the report data for $220 from our Web site at www.bestweek.com. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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