Claims of about $750m have hit the Lloyd's market as a result of payment defaults from banks in the Ukraine, according to Aon crisis management director Miles Johnstone. Speaking at the launch of the broker's Political Risk Map 2010, Mr Johnstone said that there were many notifications pending, meaning that the final bill could be higher. Ukraine was one of several countries whose risk profile was raised in the past 12 months. Latvia, which had experienced an 18% fall in gross domestic product as a result of the recent economic crisis, had experienced increasing numbers of political protests as a result of the country's austerity measures, even as these moves were being praised by the European Commission. Countries which have become safer in the past year include Sri Lanka and Vietnam.

The purchase of Paris Re last year helped boost premiums of Bermudian reinsurer Paris Re to about $2.6bn during the January renewals, of which about $440m came from Paris Re, PartnerRe has said. Some 60% of non-life treaty business renews at the beginning of the year. PartnerRe said that hid had allocated 46% of underwriting risk capital to catastrophe business, up from 31% last year. Property took up 19%, down from 25%, while the percentage allocated to specialty shrank to 22% from 28%. Paris Re, despite having become a subsidiary of Partner Re, renewed its book separately on January 1. This was to ensure an "orderly renewal process". The two books are currently being consolidated and will renew under a common book from mid-2010 on. CEO Patrick Thiele said that the takeover had resulted in a normal level of dislocation and attrition. While PartnerRe recorded a cancellation rate of 8%, at Paris Re it was 20%. Mr Thiele said that "our overall priced technical ratios on the combined book were broadly in line with those of 2009, and we maintained double-digit priced return on equities, despite the continuation of a low interest rate environment".

The days when marine insurers could get away with 100%-plus combined ratios have gone, according to Deirdre Littlefield, president of the International Union of Marine Insurers (IUMI). In a market briefing hosted by the International Underwriters' Association, Ms Littlefield said that low levels of investment income and a constrained capital market meant that it was vital for marine insurers to focus on technically sound underwriting. She estimated that a 95% combined ratio would move through to the bottom line as a 10% return on equity. However, Ms Littlefield acknowledged that marine insurers were also "inextricably linked" to the global economy and shipping markets, and that in times of recession, business was down, making it much harder to push through rate increases. With the marine hull market only returning a profit in four of the 12 years to 2008, a situation where premium income was falling, but claims were not falling proportionately, did not portend solid numbers for the industry in the near future. In a sector where there appeared to be few grounds for optimism, Ms Littlefield this week did at least point out that some older ships were being replaced by new-builds, which is reducing the average age of the world fleet. Loss claims decrease significantly for newer vessels.

Much of the international regulation that has been put forward to help the economy and cure the problems in the financial sector is "naive" and will have little impact, according to Lloyd's chairman Lord Levene, speaking in Davos to Dow Jones. "What has Sarbanes-Oxley done", he asked, answering that its main impact was to move a lot of business from New York to London. He added that in Davos this week "Swiss cantons are doing roadshows in London to attract business in Switzerland". Speaking a day later on Bloomberg Television, Lord Levene said that "if the UK, the US, France and Germany all get together and say 'we're going to tighten regulation', then some people are going to say, 'fine, we'll go to Switzerland, Singapore or Shanghai'". Lord Levene also said that 2010 could be tough for the insurance sector "when it comes to rates and investments". He noted that "there were no heavy hurricanes or other big disasters last year, so it will be difficult to increase rates". On the investment side, the sector would likely struggle to find decent returns, he said. Speaking on Bloomberg Television, Adair Turner, chairman of the UK regulator the Financial Services Authority, said that a lack of global co-operation should not mean that no-one does anything. "Ideally we would get as much global commonality as possible, but we can't hold it up on the basis that 'we aren't going to do anything unless we get agreement on everything'. The world can deal with a degree of unlevel playing fields".