What’s New: In brief (September 27, 2006)

Hedge fund and private equity investors continue to provide capital to support catastrophe risks for insurance and reinsurance companies, according to an article published by Standard & Poor’s Ratings Services. The article, entitled “Hedge Funds And Insurers: A Healthy But Tricky Relationship,” says the form of support has evolved from straight investments in new start-up companies to property catastrophe bonds and sidecars (the limited-term single-purpose reinsurance entities that quota-share portions of their sponsoring company’s book of business). “Pending capacity needs (this) could be problematic for insurers with substantial hedge fund backing,” S & P’s credit analyst Thomas Upton says. “Insurers or reinsurers that build their entire risk mitigation programs around property catastrophe bonds or, in the case of reinsurers, sidecars, could be in the riskier position in two to three years, having no dependable relationships for future risk-mitigation needs.”

Experian, a global information solutions provider, has expanded its Canadian operations by acquiring Qubec-based Northern Credit Bureaus Inc. Experian says the transaction will enable them to leverage Northern Credit Bureau’s consumer database to build its credit reporting business in Canada. This will enable clients to make more credit decisions to manage credit risk and customer relationships. Experian has had a long-term presence in Canada through its Experian-Scorex operations in Toronto and provides scoring and software tools.