Bermuda or Lloyd’s

There has been much talk of late about how Lloyd’s and the London Market are finished, there’s too much regulation, we’re not agile enough here etc etc.  You’ve seen the articles and heard the talking heads.

So it is rather engaging to see the boot on the other foot for once.  PXRE is in deep trouble after gettings its hurricane figures wrong (look at the Google Finance page on PXRE, go to the price chart, click on the 3m figure at the top and see the cliff that followed its downgrade) and is now apparently looking to Lloyd’s to see if a rescue plan can be put together.  Apparently, because of the downgrades by the rating houses and the reduction in capital, something in the order of 75% of their reinsureds are at liberty to cancel their contracts with PXRE.

However, PXRE has always been a reasonably well-regarded company and since, according to Reuters, “in 2004, approximately 75% of the Company’s property catastrophe and risk excess net premiums written emanated from clients located outside of North America”, it seems reasonable enough to suppose that, last year’s hurricane exposures aside (a big ‘aside’, I admit) the business may yet be profitable.  It would be quite nice for Lloyd’s to take it on and make a go of it.