What’s new: In brief (June 21, 2004)

AXA Re Group and its subsidiaries have seen their “A-” (excellent) financial strength rating affirmed by A.M. Best, with a stable outlook. The rating agency cites AXA Re’s improved operating performance as a result of tighter underwriting, as well as continued restructuring to reduce expenses. The transfer of AXA Re’s U.S. operations to AXA S.A. is seen as a positive move to allow the company to focus on core reinsurance operations. A.M. Best predicts a combined ratio around 100% and ROE in the region of 10-15% for 2004.

Rumors abound that ING is marketing its U.S. life reinsurance operation, according to Bloomberg. Unconfirmed reports suggest potential buyers include Berkshire Hathaway, Hannover Re, MetLife Re, Munich Re and Swiss Re, and that the sale price could reach US$1 billion. At the same time, Royal & SunAlliance has confirmed speculation that it is in talks to sell its U.K. life operations, although it would not comment on the price tag for such a sale.

Optimum Group has increased its interest in Optimum General through the purchase of “class A” subordinated voting shares by its Optimum Reassurance Inc. affiliate. Optimum General now owns 77.7% of the “class A” shares, up from 74% prior to January 2003. However, taking into account “class B” multiple voting shares, Optimum Group maintains a relatively flat 96.25% of the total voting shares in Optimum General. The purchases were made to boost the portfolio of Optimum Reassurance, the company says.