What’s new: In brief (January 16, 2005)

The Vermont Banking, Insurance, Securities and Health Care Administration (BISHCA) says 43 new captives were formed in the domicile in 2004. The forms were varied, with 29 pure captives, 8 risk retention groups (RRGs), and also industrial insureds, sponsored, association and branch captives being formed. Some of the notable new entrants are Wal-Mart Stores, Best Buy, John Deere and Textron. BISHCA says it is also seeing a host of new applications since the New Year, with specific growth in the medical liability and RRG categories.

Everest Re will not be subject to a downgrade despite disclosing that it will suffer after-tax catastrophe losses of US$133 million in the fourth quarter of 2004, says rating agency Standard & Poor’s. Everest Re says the losses include the Florida hurricanes, as well as an initial loss provision for the December 26 Asian tsunami. The reinsurer had already reported US$185 million in estimated losses for the Florida hurricanes in the third quarter of 2004. The rater says 2004 yearend earnings should still fall within expectations despite the losses.

Royal & SunAlliance Insurance Group is among the first insurers to report expected losses from recent storms and flooding in the U.K. and Scandinavia. The British insurer says losses will be around BP30 million (Cdn$70 million). Windstorm Erwin, which hit over the weekend of January 8, is being blamed for at least 30 deaths. The storm brought winds of 150 km/h and heavy rains to a wide swath of countries including Britain, Ireland, Denmark, Sweden, Germany and the Baltic States.