A “prudent” investment strategy has meant that Italian insurers are coping well with the global financial crisis, according to Giancarlo Giannini, chairman of Italian regulator Isvap, quoted by Bloomberg. Mr Gianinni said at a conference in Rome that the Italian insurance industry had shown “encouraging” signs in the first quarter. Isvap noted that the implosion of the Icelandic economy and the collapse of Lehman Brothers had cut about 0.5% from the Italian sector’s technical reserves, equal to about €1.3bn ($1.8bn). This had cut the solvency index in the Italian life sector to 1.7 from 1.9, and in the non-life sector to 2.6 from 2.7. Investment portfolios had recovered considerably this year, Isvap said.

Insurers from Russia expressed disappointment last week at the recent negative ratings imposed on the country by rating agencies. At the annual conference of the All-Russia Insurance Association, held in Moscow, insurers in particular were disturbed by the decision of Fitch to assign a negative outlook to the national market. Fitch said that a slowdown in the Russian economy and volatile investment markets led to deteriorating insurance market conditions. Insurers said that the reaction of Fitch was “too harsh”. However, the market did express concerns at price competition, claiming that some players were cutting rates to unsustainable levels in property, marine and motor non-third party liability. Fitch said recently that the downturn in Russia could lead to a growth in fraudulent claims. Fitch recently downgraded Moscow Insurance and revised its outlook to negative from stable; placed Rossiya Insurance on rating watch negative, while revising the outlooks on AlfaStrakhovanie, JSIC Gefest and Russian Insurance Centre to negative from stable. ACE Insurance and Sogaz escaped downgrades, having their ratings maintained, with stable outlooks.

Arch Insurance Group, a division of Bermudian insurer/reinsurer Arch Capital Group, has established two new US underwriting units, Arch Property & Casualty Group and Arch Financial & Professional Liability Group. Michael Murphy, previously senior vice-president at Arch Insurance, has been named president of the p/c group. David McElroy has been named president of the financial & professional liability operation. He was previously head of Connecticut-based Hartford’s Specialty Finance Division. Arch also named John Rafferty, the former head of Hartford’s financial products division, as head of the executive assurance business in the new financial & professional liability unit.

Airline Air France will receive immediate hull compensation of €67.4m ($93.4m) as a result of the Airbus 330 crash in the Atlantic last week, reports AFP. Axa Corporate Solutions, which led the cover, said that it was one of a pool of insurers for the plane and that it would pay out €8.4m, 12.5% of the total bill. The company said that individual compensations would take much longer to calculate. Some confusion was generated in Geneva when Brazil President Lula da Silva said that French President Nicholas Sarkozy had assured him that the French government would compensate all the families of crash victims, be they from Brazil, France, or elsewhere. An Air France spokesman later told Associated Press that the airline and its insurers, not the government, would be handling compensation. The French Transport Ministry also denied that the government would be paying any compensation.