Canadian Underwriter

What’s new: In brief (June 09, 2004)

June 9, 2004   by Canadian Underwriter

Print this page Share

A.M. Best has affirmed the “A” (excellent) financial strength rating of Swiss (re)insurer Converium AG and its core subsidiaries, with a stable outlook. The rating comes as a result of expected improvement in the company’s 2004 earnings, but is offset by uncertainty surrounding reserving related to U.S. casualty business written between 1997 and 2001.

A new study shows U.S. small businesses are paying the majority of costs for the country’s out of control tort system. In a National Economic Research Association (NERA) study for the U.S. Chamber of Commerce, businesses with less than US$10 million in annual revenue pay 68% of the cost for the U.S. tort system, or US$88 billion annually. Businesses with less than US$1 million in revenue pay 26% alone, or US$33 billion per year. The average small business with US$1 million in annual revenue pays about US$17,000 per year in tort liability costs.

Western Financial Group (TSX: WES) has completed the first part of a private placement which will fund its acquisition of Federate Life. In total, Western will sell 2 million shares for proceeds of $5 million dollars, with this first placement consisting of 400,000 shares for proceeds of $1 million. The rest of the private placement is expected to close in August 2004.