What’s New: In brief (December 13, 2005)

Effective April 1, 2006 Andrew Cook will step down as chief financial officer of AXIS Capital Holdings Limited (NYSE: AXS). The Bermuda-based global insurance and reinsurance Company has commenced an executive search to replace Cook, who left for personal reasons. “As our chief financial officer since our founding,” John Charman, chief executive officer and president of AXIS Capital, says, “Andrew has been instrumental in advancing our financial reporting practices, directing our activities in the capital markets and developing our relationships with both the investment community and the rating agencies.”

The global reinsurance industry has received a negative outlook from Standard & Poor’s Ratings Services, which based its rating on the repercussions of the 2005 hurricane disasters. “The outlook reflects near-term strains on reinsurers’ financial strength, after 2005 saw the largest catastrophe losses in the industry’s history,” Laline Carvalho, S&P’s credit analyst, says. “The outlook also indicates that there will be slightly more downgrades than upgrades among rated entities in the near term.” The article explaining the negative outlook for the reinsurance sector “Global Reinsurance 2006 Outlook: Volatile Earnings And Near-Term Capital Strain Dog Sector,” claims that the three major North American hurricanes of 2005 resulted in an estimated US$70 to US$90 billion aggregate loss for primary insurance and reinsurance companies. The reinsurance industry will be liable for a substantial portion of those losses. The storms are expected to continue to strain some issuers’ financial strength in 2006, and S&P’s report also voices concern regarding how much coverage some reinsurers will write, how they will price it, and the potential for adverse reserve developments linked to 2005’s catastrophes. However, despite five downgrades in the past two months most companies in the industry are rated in the ‘A’ or ‘AA’ categories. Among the factors helping to mitigate the negative outlook are the expectation of higher pricing in 2006, continued support of the industry by the capital markets, and major enhancements in the modeling and risk management tools utilized by the industry.

The 2006 Subaru Legacy has been awarded the Insurance Institute for Highway Safety’s (IIHS) new ‘Gold’ designation for occupant protection in the mid-sized car category. The Subaru won the elite ‘Gold’ award as a result of earning good ratings in the Institute’s frontal offset and side impact crash tests. The car also exhibited seat/head restraints that provide good protection against neck injuries in rear impacts. Stringent testing by the IIHS was embarked upon to determine the winning vehicles, and these tests exceed the regulations and standards set by government safety agencies. “In addition to the excellent passive safety protection measured by the IIHS,” Katsuhiro Yokoyama, president, chairman and chief executive officer of Subaru Canada Inc., says, “every Subaru is also equipped with the outstanding active safety of our Symmetrical All-Wheel Driving System as standard equipment – because the ideal solution is to avoid a crash altogether.” The foundation of Subaru’s passive safety (occupant protection) is the Ring Frame Reinforced structure, with a front-end structure that disperses collision energy in three directions. This structure forms a series of “rings” around the passenger compartment, which protects in the instance of a variety of collision types. The Subaru Advanced Airbag System uses sensors to detect the presence and weight of a front passenger as well as the driver’s distance from the steering wheel. In addition, all Subaru Legacy and Outback models contain a four-wheel disc Anti-lock Brake System with Electronic Brake-force Distribution.

The CIP Society’s nomination review committee has selected Kip Van Kempen, FCIP (fellow chartered insurance professional), president, Ajax-based Best Buy Insurance Brokers, as the 2005 recipient of the GTA Fellow of Distinction Award. Van Kempen has served the insurance industry in countless roles for more than 25 years. He was president of the national Society of Fellows for the Insurance Institute from 1987 to 1988, president of the Toronto Chapter Society of Fellows for the same term and chair of the education committee for the Insurance Institute of Ontario. Van Kempen taught CIP courses for more than 14 years and has marked CIP exams since 1967. He also served as a director for RIBO for a three-year term, was a territory director for IBAO and has been the chair of various insurance broker forums. Today, he is still actively involved with the Insurance Institute in Toronto as a committee member. The Fellow of Distinction Award was created to recognize outstanding achievement in the insurance industry in Toronto. Van Kempen will be honoured at The CIP Society’s New Fellow’s Reception at the National Club January 19, 2006.