GLOBAL BRIEFS

Following an extensive review of operations arising from its planned management buyout, Zurich Re (London) Ltd. will cease underwriting aviation business beginning Oct. 1. Zurich Re is in talks to transfer all current aviation business to the British Aviation Insurance Co. Ltd., a company managed by British Aviation Insurance Group Ltd. of London. Runoff contracts for the years up to and including 1995 will continue to be handled by Zurich Re (London). All subsequent years will be handled by BAIG. Zurich Re (London) says the management buyout of all non-aviation-related business from Swiss parent Zurich Group is "imminent." The management buyout is being led by Dennis Purkiss, Zurich Re (London) chief executive officer, and backed by venture capital group Candover Investments (BI, Aug. 10). . . .Sydney, Australia-based HIH Winterthur International Holdings Ltd. has issued a takeover bid for fellow Sydney-based general insurer FAI Insurances Ltd. HIH, whose main operating subsidiaries are HIH Casualty & General Insurance Ltd. and CIC Insurance Ltd., yesterday announced it had acquired a 14.3% stake in FAI and plans to make a takeover offer for the remaining shares. Formal takeover documents have not yet been distributed. The move follows AMP Ltd.'s bid last month for GIO Australia Holdings Ltd., which GIO's board rejected (BI, Aug. 31). Either takeover, if successful, would create Australia's largest general insurance group. . . .The Institute of London Underwriters is to levy its members to resolve outstanding property liabilities that have delayed its merger with the London International Insurance & Reinsurance Market Assn. The merger was delayed in June so the ILU could clear up lease payments surrounding its building in London's Leadenhall Street (BI, June 29). The ILU says the levy will secure the financial future of the ILU building and recommends the two associations reconvene their meetings to vote on the merger, which is still expected to be completed by Jan. 1. . . .Germany's Munich Re Group, the world's largest reinsurer, has for the first time revealed its valuation, or "hidden," reserves. Valuation reserves, the amount by which the market value exceeds the book value of a company's investments, are a key indicator of financial strength. The reinsurer's board last week announced that, as of June 30, the company's investments, with a book value of 200 billion deutsche marks ($119.16 billion), had valuation reserves of 82 billion deutsche marks ($48.86 billion). By mid-September, due to international stock market turbulence, the valuation reserves had fallen to 74 billion deutsche marks ($44.09 billion). Munich Re claims it will "derive significant competitive advantage from this outstanding financial strength" as primary insurers are placing increasing importance on reinsurers' security. . . . French reinsurer SCOR S.A. of Paris has announced plans to buy back 5% of its equity base from shareholders within the next six months. SCOR received shareholder approval in May to purchase up to 10% of the publicly held company's shares. SCOR says the repurchased shares either will be canceled to increase earnings per share for all shareholders or invested in a stock option plan. Depending on market conditions and investment opportunities, SCOR may buy back more shares in the future. . . .Standard & Poor's Corp. has upgraded the insurer financial strength rating of German reinsurer Gothaer Ruckversicherung A.G. of Cologne to BBB+ from BBB-. S&P says the improved rating follows Cologne Reinsurance Co.'s 85 million deutsche mark ($50.64 million) purchase of a 27% stake in Gothaer Re in July. S&P expects Gothaer Re's stronger capital base and access to Cologne Re's technical expertise will allow the company to write larger and more complex risks.