US business calm despite Iraq war

The US led invasion of Iraq has not led to increased fears among corporate America, according to a survey by Allianz Global Risks.

This week Allianz released the results of a survey of 300 risk professionals who attended the 2003 Risk Insurance Management Society conference held in April.

The report is based on one-on-one interviews with the risk managers and brokers who came from a broad range of industries including banking, chemicals, construction, food, real estate, retail and transportation and utilities.

The report was written by two executives of Allianz Insurance Company, the US unit of Alliance Global Risk. Brian Daly, senior vice president and chief underwriting officer and Brian Gauen, vice president of D&O underwriting. Eighty-four percent of risk managers said risks to their organisations did not increase at all or only slightly since the start of the US war with Iraq.

As a result, three out of four said their business continuity plans had not changed at all since the war's start. In contrast, businesses had reacted to the September 11 terrorists attacks by promptly instituting continuity plans.

However one in five risk managers said they were not confident that their business contingency plans are effective. There were mixed responses to the Sarbanes Oxley regime which was brought in after the Enron fiasco. Only 39 percent of risk managers believing the legislation will reduce corporate malfeasance. The results confirmed that Directors and Officers coverage is gaining in popularity: 87 percent of buyers and brokers obtained D&O cover or expected to obtain it within the coming months.

Almost half (47 percent) of risk managers identified insurance price increases as their most pressing issue.

Tyco shares top 52-week high

BOSTON - Shares of Tyco International Ltd. topped a 52-week high yesterday, jumping nearly 7 percent, but it was not immediately clear what drove the surge.

Tyco, a Bermuda-based conglomerate whose stock plummeted last year after allegations of management fraud, did not issue any news. Wall Street firms did not issue new research reports yesterday. The stock rose $1.32, or 7.3 percent, to $19.46 in afternoon trade on the New York Stock Exchange. Shares topped a 52-week high of $18.70 on December 2.

Sheffield receives 'A' financial rating

Ratings agency Standard & Poor's announced that it assigned its 'A' financial strength rating to Sheffield Insurance Corp. (Sheffield), a writer of specialty insurance, which has just been bought by Bermuda insurer Axis Specialty.

The rating agency said that it had given the high rating based on its integration into the business plan of its parent, experienced management, appropriate reinsurance and capital, and financial profile. Standard & Poor's also said that it affirmed its 'A' ratings on all of the currently interactively rated insurer units of Axis Capital Holdings Ltd. (Axis).

Standard & Poor's also said the outlook on Axis is stable.

Sheffield was recently acquired by Axis Specialty US Holdings Inc., an indirect subsidiary of Axis. Axis is a Bermuda-based holding company formed early this year that has global reinsurance and specialty insurance subsidiaries. Sheffield will be renamed Axis Surplus Insurance Co. and will operate solely as a carrier of nonadmitted business in the US Business written includes property, umbrella and excess casualty, primary casualty, and professional lines insurance.

Although Sheffield has an underwriting history that predates the acquisition by Axis, most of its outstanding exposure is either newly acquired through the purchase of the directors' and officers' insurance renewal rights from insurers of Kemper Corp. or is business recently written.

Standard & Poor's expects that the company's exposure at year-end 2003 will be well in excess of what it is today as management exercises these renewal rights.