UK-based composite Aviva has renewed its contract with locally based Barclays Bank until 2015. The agreement, under which Aviva is the sole provider of home insurance offered to Barclays retail customers, was first signed in 2005. Gary Duggan, Barclays managing director for consumer lending, insurance and investments, said that the deal with Aviva had been "very successful, with sales of insurance through Barclays now making us one of the top ten providers in the UK.... Since we began the contract with Aviva, the number of home insurance policies we provide has increased by 40%.

US government-controlled insurer AIG has slashed its debt to the New York branch of the Federal Reserve by $25bn through two debt-for-equity swaps. Under the previously announced deals, the New York Fed is receiving preferred interests in two special purpose vehicles that AIG has established for its American Life Insurance Co (Alico) and American International Assurance Co (AIA) life assurance units. The Fed's interest in the AIA vehicle has a liquidation preference of $16bn, while its interest in the Alico vehicle carries a liquidation preference of $9bn. The transaction reduces AIG's outstanding debt to the New York Fed to around $17bn from $42bn and cuts the overall amount of funds available under the loan facility to $35bn from $60bn. The reduction in debt "sends a clear message to taxpayers: AIG continues to make good on its commitment to pay the American people back", said AIG chief executive Robert Benmosche. The creation of the SPVs is aimed at preparing AIA and Alico for initial public offerings or a sale to a third party, depending on market conditions and subject to regulatory approval, AIG said. Mr Benmosche acknowledged that the group expects "continued volatility in reported results in the coming quarters, due in part to charges related to ongoing restructuring activities". The latest transaction with the Fed will give AIG a Q4 charge of $5.7bn in addition to $11.7bn in charges that it has already announced. Another such charge, Mr Benmosche said, would stem from its proposed sale of Taiwanese life assurance unit Nan Shan.

Reinsurer Swiss Re is continuing its push for legislators to recognize that insurers are very different financial animals from banks and that a one-size-fits-all legislative framework was "a dangerous tendency" and could have dire consequences for the life assurance sector. Speaking at the Swiss Re Economic Forum Media Conference in London yesterday, Mr Hess said that the main differences between banks and insurers were "liquidity and contagion", with very few insurers needing government support. "Taxpayer support, as far as insurers were concerned, was confined to very few companies, and was almost entirely due to the banking type operations of these companies". He said that if life assurers were given tougher capital requirements in line with new restrictions on banks, then they could be forced into even more conservative investments, removing "an essential source of financing for the real economy" and possibly even making it impossible for life assurers to offer a viable business proposition. Mr Hess noted a comment that last month European Central Bank President Jean-Claude Trichet had argued that big insurers should be considered "systemically relevant" and that the traditional view that insurers weren't general potential sources of systemic risk needed to be challenged. Mr Hess conceded that "the insurance industry has to do more" to get its argument across, adding that "Trichet is right that insurers are relevant to the capital markets. They key question is, what does systemic regulation mean? If you say that insurance companies have to be regulated in the same way, then I feel that this is not the right way to go forward".

Hannover-based insurance group Talanx, the controlling company for Hannover Re and HDI-Gerling, anticipates a result in 2009 "on a scale of the years prior to the financial crisis", the company said this morning. Group CEO Herbert Haas said that "Talanx is back to the level of 2007, and that was a very good performance". Gross written premiums including savings elements are expected to grow 8.2% year on year to EUR20.6bn ($31bn), mainly because of Hannover Re's assumption of the US ING life assurance portfolio. Net premium earned is likely to grow 14% year on year to EUR17.0bn, helped by increased retentions in several primary and reinsurance sectors. Gross written premium in p/c primary business is likely to contract 4.4% year on year to EUR5.6bn, partly because of exchange rate movements, partly because of a significant drop in the Italian market, and partly because of the sale of a Spanish subsidiary. Gross written premiums in non-life reinsurance are likely to grow by 13.7% year on year to EUR5.7bn, partly because of rate-hardening and an improved retention rate of 92.9% (2008:89.0%). However, the combined ratio is likely to rise to 97.8% from last year's 95.2% Net investment income will rise by 65.5% to EUR2.7bn, following heavy writedowns and losses on disposals in 2008. Mr Haas said that the restructuring of Talanx's primary business, announced in September (IIN 24, September 22 2009) was "moving forward at a brisk pace". He added that Talanx's goal was to rank among the 10 largest insurance groups in Europe over the medium term. It is currently ranked 14th. Referring to the co-operation discussions initiated between Talanx and Swiss Life in the middle of the year, Talanx said that "these efforts are moving forward to the satisfaction of both partners