Reinsurance

An executive involved in the bidding war for IPC holdings said after that battle ends the merger and acquisition landscape will likely heat up further in Bermuda.

Fitch Ratings has placed the "A-minus" ratings of Bermuda-based Flagstone Reinsurance Holdings, Ltd. on Rating Watch Negative in response to Flagstone's $1.8 billion offer to acquire IPC Holdings, Ltd.

Insurance products would be mostly exempt from oversight by the proposed U.S. Consumer Financial Protection Agency under legislation submitted to Congress last week by the Treasury Department.

The chairman of Flagstone Reinsurance Holdings expects the board of IPC Holdings to decide by tomorrow whether it will endorse Flagstone's offer to acquire IPC in a deal valued at $1.8 billion.

Reinsurance executives believe a higher level of discipline by reinsurance underwriters gives the group a more favorable outlook than would be the case for primary carriers in 2009.

Despite many factors that should be contributing to a hardening market overall, competition in some coverage lines and geographic regions has heated up, while activity in many other areas remains tepid, keeping price hikes more modest than anticipated.