What’s New: In Brief (June 22, 2007)

The capital strength of the insurance industry is growing due to strong operating profitability, putting pressure on rates and resulting in a slow growth environment going forward, according to Thomas Holzheu, with Swiss Res Economic Research & Consulting Unit, in a Web cast.
We should see a continuation in moderating or softening pricing and this will spread also into property lines, Holzheu said.
Holzheus observations include:
Strong underwriting fundamentals helped push the industrys return on equity (ROE) to 14.6% in 2006, a marked improvement over 2005s ROE of 11.4%. The 2007 ROE is expected to be around 13%.
Rate adequacy is still good in most segments and terms and conditions are holding firm.
Insurers overall investment results were down in 2006, particularly driven by lower realized capital gains. We expect rising investment yields, however, this will be insufficient to fully offset softening pricing.

Canadian employees of XL Capitals subsidiaries, XL Re and XL Insurance, put their painting and planting expertise to work in May 2007 as part of the companys Global Day of Giving. For the second year in a row, more than 3500 XL staff worldwide spent one business day working to benefit their local communities.
As an initiative of XLs Corporate Social Responsibility Program, our Global Day of Giving gives us a welcome opportunity to support local charities that are near and dear to us, Cindy Guyatt, country manager for the XL Insurance companies, said in a release.