Bermudian insurer/reinsurer Aspen Insurance Holdings has reorganized its corporate structure by separating its operations into two separate brands, Aspen Insurance and Aspen Reinsurance, in a move designed to improve customer service. Aspen Insurance will be comprised of the group's existing international insurance and US insurance divisions, and will be headed by chief executive Rupert Villers, currently global head of financial and professional lines. Bill Murray will retain his post as president of US insurance operations. Aspen Reinsurance is to include the group's property reinsurance, casualty reinsurance and specialty reinsurance operations. That division is to be headed by chief executive Brian Boornazian and president James Few. In addition, Aspen has named Julian Cusack, currently chief operating officer, as group chief risk officer in addition to his role as chairman and chief executive of Aspen Bermuda.

Lloyd's insurer Omega is to face a third challenge from major shareholder Invesco and a group of other investors (IIN 24, January 4 2010), which want to bring the company to a special general meeting and to eject Walter Fiederowicz as chairman, to be replaced by former Benfield chairman John Coldman, reports this morning's Financial Times. Omega has reportedly offered a compromise under which Mr Coldman would be accepted, as would James Bryce as senior independent director in place of Christopher Clarke. However, Omega still rejects Invesco's proposal for four new independent directors — Bermuda-based ex-Aon executive and sidecar expert Robin Spencer-Arscott, plus Bermuda-based lawyers Jonathan Betts, Ernest Morrison and David Cooper, all with Cox Hallet Wilkinson. The dispute began with the surprise departure last October of John Robinson as Chief Underwriter, only nine months after a $190m placement and a shift to the main listing of the London Stock Exchange. Lloyd's reportedly had expressed concern that Omega was not developing the risk management systems commensurate with its growing size. The third requisition from Invesco and others, who together represent about 60% of shareholders, will correct technical errors in the versions filed in December, which Omega ignored because it said it was not legally binding under Bermudian law.

The outlook is poor for reinsurers' bottom lines in 2010, according to a sector comment from Moody's in this week's Credit Outlook. Commenting on the reports from reinsurance brokerages, Moody's said that prices year on year appeared to be flat to down 10% "nearly across the board", meaning that the credit profile of the reinsurance sector "may not be as healthy as current capital levels indicate". Moody's also expressed concern that reinsurers might step up share repurchase activity, which could leave them vulnerable to catastrophe losses. "We view these developments as having negative implications for policyholders and other creditors of reinsurers", Moody's said. The agency changed its outlook on the reinsurance industry in September 2009, to negative from stable. At the time Moody's noted that there was excess capacity, weak demand, a fragile capital market and technically unsound casualty rates. "With early confirmation that rates are continuing their downward trend, we believe the credit profile of the industry may not be as healthy as current capitalization levels suggest", Moody's said. Author James Eck concluded that, absent a transformational catastrophic event, it expected reinsurer profit margins in 2010 "to come under increasing pressure as rate decreases affect the top line, investment income drops owing to low investment yields, and the impact of reserve releases, which have bolstered underwriting results in recent years, diminishes".

Attitudes within the non-life, life and broking sectors improved in the fourth quarter of last year, with the broking sector being the most optimistic, according to the latest Confederation of British Industry/PricewaterhouseCoopers Financial Services Survey. Optimism in the non-life sector rose for the fifth successive quarter, with the declines in volume, value and profitability experienced in Q4 all being broadly as expected, although investment income declined more than had been expected. In the life sector, companies saw an increase in new business values for the first time in more than two years, although business volumes as a whole declined. The net result was a fall in profitability that was more pronounced than had been expected.  In the broking sector, business confidence rose "at its fastest rate since September 1993", after business volumes held up better than had been expected and margins increased faster than had been anticipated. Although the decline in employment had increased in Q4, a reversal was expected and there were positive employment expectations for the first time in a couple of years. Andrew Kail, UK insurance leader at PwC, warned that "although the life insurance sector reports an increase in optimism, this seems to be pinned on a hope of future recovery in demand rather than short-term reality". He added that "concern remains around the cost of compliance as the sector continues to focus on Solvency II implementation and other regulatory challenges".