Also in the news this week ...
$4.1bn charge for AIG
American International Group (AIG) will take a $4.1bn (£2.6bn) charge in the fourth quarter of 2010 to strengthen loss reserves at non-life subsidiary Chartis. The reserve strengthening relates to long-tail liability business. Four classes – asbestos, excess casualty, excess workers’ compensation and primary workers’ compensation – comprise approximately 80% of the total charge. The majority of the strengthening relates to development in accident years 2005 and before.
Tax pulls THB profit down
London-based broking group THB made a pre-tax profit of £702,000 for the year ended 31 October 2010, up 22% from the £575,000 it made the previous financial year. However, because of a £441,000 tax charge in 2010, compared with a £262,000 tax credit in 2009, profit after tax fell 69% to £261,000 from £837,000.
Gallagher raises $125m
Arthur J Gallagher has raised $125m (£78m) in a private placement of senior unsecured notes. The US-based broking group intends to use the proceeds from the issue to fund acquisitions. This private placement includes $75m of series D notes bearing interest at 5.18%, and $50m of series E notes bearing interest at 5.49%. The series D notes mature in 2021 and the series E notes mature in 2023.
Willis’s £100m pay freeze ends
The decision by global broking group Willis to end its pay freeze will cost it $100m (£62m) in salaries and benefits this year. Willis will fund the change by conducting a global review of operations in the first quarter of this year, which it expects to result in annualized savings of between $90m and $100m in 2012. The broker made a $455m profit for the 2010 full year, up 4% on the $438m it made in 2009.