Reinsurance

Transatlantic Holdings Inc. says the merger offer from Validus Holdings is not a superior one to the agreed deal it has with Allied World Assurance Co. Holdings—at least, not yet.

The common assertion that the level of prior-year loss-reserve releases declined last year is not entirely correct, according to a recent compilation of reserve changes that excludes the impact of one large carriers reserve hike.

Validus Holdings’ bid for Transatlantic Holdings, if successful, will be credit-positive for Validus due to strategic benefits, but credit-negative for Transatlantic due to higher catastrophe leverage, according to Moody’s.

Two rating agencies say the unsolicited bid by Validus Holdings Ltd. to acquire Transatlantic Reinsurance Co. does not affect Validus’ rating.

AXIS Capital Holdings Limited says it expects between $90 million and $105 million in second-quarter losses, net of reinsurance, tax and reinstatement premiums, from a June aftershock in Christchurch, New Zealand and from April and May U.S. storms.

Procedures to unwind troubled insurance companies can be complicated by unforeseen tax issues, blindsiding stakeholders—regulators, creditors, owners of troubled companies, and even healthy ones included in consolidated returns—at a time when none of these parties is focusing on the Internal Revenue Service.