Annuity and Life Re Stops Writing New Business
Annuity and Life Re (Holdings) Ltd., Hamilton, Bermuda, says it has stopped writing new reinsurance business and will refuse to accept any new business under existing treaties under current terms.
The reinsurer also says that it expects to report a “significant loss” for the fourth quarter of 2002, and that it has had trouble finding the credit and other collateral it needs to support its business.
The company suffered a loss during the latest quarter in part because mortality has been worse than expected and the company has received a “large number of open claim submissions that [do] not fit historical or expected patterns,” Annuity and Life Re says.
Meanwhile, the company says it continues to lose money on a large variable annuity guaranteed minimum death benefit contract, and it has been spending heavily on efforts to raise capital.
Annuity and Life Re says it is also carrying losses related to fixed annuity reinsurance that have not yet filtered into its income statements. The losses involve “embedded derivatives,” or reinsurance obligations derived from the performance of various financial indices.
But a large reinsurance contract backing annuities written by a unit of AEGON N.V., The Hague, Netherlands, is performing within expectations, Annuity and Life Re says.
Reproduced from National Underwriter Edition, March 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.