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What’s new: In brief (June 09, 2004)


June 9, 2004   by Canadian Underwriter


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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.