Friday, June 26, 2009


The ongoing recession is taking a toll on the U.S. workers’ compensation industry, but that bane is not without a boon as well. Job cuts, particularly in construction and manufacturing, are putting downward pressure on revenue from written premiums.

“It’s certainly clear that the premium base will be declining,” Harry Shuford, chief economist for the National Council on Compensation Insurance, said in this week’s issue of BestWeek U.S./Canada. With fewer jobs, some companies are seeing upward pressure on rates. “We have the same exposure, but we lost 10-15% of premium,” said Joe Treacy, assistant vice president, workers’ compensation products and development for Hartford Insurance Group.

In BestWeek Europe, London-based private equity firm Pamplona Capital Management, which has been building a stake in Lloyd’s insurer Chaucer Holdings plc, has restated its intention to buy 29.9% of Chaucer. Under London Stock Exchange rules, the acquisition of 30% or more of a company would trigger a compulsory full offer. The announcement came after the ending of talks between Chaucer and fellow Lloyd’s insurer Brit Insurance Holdings, which had made an offer for Chaucer. Brit withdrew its offer after it had been rejected by Chaucer’s board. The failure of the Brit approach sparked the exit of Ewen Gilmour, Chaucer’s chief executive.

Also, in BestWeek U.S./Canada, after 15 drafts since early 2005 the National Association of Insurance Commissioners adopted Natural Disaster White Paper at its Summer Meeting in Minneapolis this month. But some confusion could still surround the document. The paper, entitled, “Natural Catastrophe Risk: Creating a Comprehensive National Plan,” even came with a disclaimer: This paper contains various perspectives on preparing the United State of America and the various states for natural catastrophes. The various perspectives are presented to demonstrate the diversity of views on this important topic. Even that was the subject of last-minute clarification.

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