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Member, Beacon International Group, Ltd.
LONDON--Lloyd's of London company Wellington Underwriting P.L.C. has raised £448 million ($653.1 million) to set up a new property/casualty reinsurer, Wellington Re.
The proposed new company will focus on property and casualty reinsurance and U.K. commercial insurance and will write about £200 million ($320.7 million) of net premium in 2002, Wellington said.
Wellington announced Wednesday that an investor group, led by The Blackstone Group in London and European private equity fund Candover Investments P.L.C., had agreed to provide capital of £448 million to the proposed company.
The investors have formed a new, Bermuda-based holding company, called Holdings, which will acquire City Fire Insurance Co. Ltd. for about £16 million ($23.3 million), it said. City Fire will be renamed Wellington Re.
Wellington said the new company would have a strong relationship with its composite Lloyd's syndicate 2020. Plans call for Wellington Re and syndicate 2020 to offer each other quota-share reinsurance of up to 20% of their respective underwriting portfolios.
Wellington must now seek approval for the venture from the U.K. financial services regulator, the Financial Services Authority, Lloyd's and a majority of third-party capital providers to syndicate 2020.
In a separate development, Wellington announced Tuesday that it would cease writing both new and renewing professional indemnity coverage. It said that such coverage accounted for just 2% of its overall premiums.