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Member, Beacon International Group, Ltd.
PEMBROKE, Bermuda-American International Group Inc., Chubb Corp. and a Goldman, Sachs & Co. unit have formed a $1.5 billion insurer and reinsurer in Bermuda.
The company, Allied World Assurance Co. Ltd., will write commercial property/casualty insurance and reinsurance, as well as some specialty lines.
Michael I.D. Morrison, a former AIG executive, will come out of retirement to serve as president and chief executive officer of the joint venture, which will be based in Pembroke, Bermuda.
AIG has contributed $291 million to AWAC's holding company, Allied World Assurance Holdings Ltd. Chubb and GS Capital Partners 2000 L.P., an investment fund managed by Goldman Sachs, each contributed $250 million; the remaining amount of capital was contributed by outside investors.
"Insurance markets have experienced unprecedented demand for a number of coverages, without which businesses cannot operate prudently. AWAC will supplement existing market capabilities and capacity," AIG Chairman and CEO Maurice R. Greenberg said in a statement. Mr. Greenberg will be chairman of AWAC and Dean O'Hare, chairman and chief executive officer of Chubb, will be deputy chairman.
The main focus of AWAC, which is already accepting business, will be primary and excess insurance, said Mr. Morrison said.
IPC Reinsurance Co. Ltd., a Bermuda-based property catastrophe reinsurer in which AIG has a significant stake, will underwrite AWAC's property cat book, he said.
AIG's office in Bermuda will provide administrative services to AWAC, Mr. Morrison said.
The formation of AWAC, which had been rumored for several weeks, follows the formation of several other insurers and reinsurers seeking to take advantage of the rapidly tightening insurance market since the Sept. 11 terrorist attacks in the United States.