Broker Willis has warned that the current hard market for financial institutions liability insurance, driven by the financial crisis, is likely to soften at some point during 2010. Renewal premiums for financial institutions D&O insurance recorded gains of at least 10-15% but according to the Willis FI Index, the expected arrival of new capacity in 2010 will kick-start competition between insurers and put premium increases under pressure. In addition, Willis said premium increases will also fall as insurers become more confident over new losses from the sector. However, buyers with renewals due in January 2010 are unlikely to benefit from the expected softening of rates as insurers try to claw back the higher costs of reinsurance while addressing large losses for 2007 and 2008 policy years, with some loss ratios running as high as 300%. Duncan Holmes, managing director of Willis' FINEX Professional Risks, said: "The question that everyone wants to get an answer to is how long will these conditions last? To generate the environment necessary for a 'softer' market, there needs to be both an excess of capacity and a willingness from insurers to compete for business."

Passengers booked on British Airways flights affected by the proposed 12-day strike over the Christmas period are being warned to check their travel insurance policies and contact the airline. The Association of British Insurers (ABI) told policyholders that travel insurance can often be transferred to cover new travel arrangements but it warned that in the case of flight cancellation, policies can vary. "Some policies cover against specific risks such as illness, redundancy, being called to jury service, but not industrial action, while other policies may provide this cover," the ABI said.

QBE European Operations is to buy the brand and renewal rights of Lloyd's service company Evergreen from MSP Underwriting Limited, the Lloyd's underwriting agency owned by Munich Re. QBE European said the acquisition is in line with its ambition to grow its property business and expand in the UK to take a top five market position. Evergreen services small to medium-sized business and provides cover for sectors including manufacturing, property ownership, technology and leisure. Evergreen was acquired by Munich Re as part of its acquisition of MSP Underwriting in 2007.

Rating agency Fitch has withdrawn the financial strength rating of Novae Insurance Company Ltd (NICL) after first downgrading the company to BBB from A-. The move is directly linked to Novae Group's plan, announced earlier this month, to transfer the entire book of in-force policies at NICL to its Lloyd's business, Novae Syndicates, in 2010, placing the remainder in run-off. Fitch said the new rating reflects its belief that the residual business left to run-off will be more capital intensive. The restructuring is expected to release surplus capital held by NICL and increase the group's return on equity. At the time of the announcement, Novae said since the formation of NICL in 2006 rating agencies had "become more demanding in their credit assessment process" and that NICL faced "a more challenging rating agency background". Fitch said it will continue to cover Novae Group Plc's long term issuers default rating and subordinated debt, which have both been assigned a negative outlook.