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Canopius looks for growth and diversity in Creechurch deal
[London]Lloyd's of London insurer Canopius Group Ltd. has announced that it has reached an agreement to acquire the entire operations of fellow Lloyd's business Creechurch Underwriting Ltd. Creechurch manages Lloyd's syndicates 1607 and 3786 for the 2006 year at Lloyd's, with combined premium capacity of £90 million ($135 million). The insurer underwrites marine and energy, personal accident, United Kingdom liability and professional indemnity insurance.
Guernsey-domiciled Canopius manages Syndicates 4444 and life syndicate 44, as well as the runoff of Syndicate 839, which ceased trading on December 31, 2003. The company was formed in 2003 with the management buyout of Trenwick Managing Agents Ltd., the solvent Lloyd's subsidiary of Trenwick Group Inc., which ceased writing business in 2003.
According to Canopius, all of Creechurch's Lloyd's business will be written through syndicate 4444 from 2007 onwards. In a statement, the company said that it intends to increase syndicate 4444's gross premium capacity from £300 million to £450 million for 2007.
Michael Watson, chairman and chief executive of Canopius said: "The acquisition furthers our ambitions for profitable growth, while increasing diversification and lowering volatility. Creechurch's operations are highly complementary to those of Canopius. The combination of Creechurch's marine and energy business with Canopius's cargo and specie team will create a significant force in the marine market," he said.
The transaction remains subject to regulatory consent and customary closing conditions.
By Stuart Collins
Flagstone Re holdings files IPO
[HAMILTON, Bermuda]Flagstone Reinsurance Holdings Ltd., a reinsurance holding company, has filed an initial public offering of its common shares valued at up to $175 million (€138.9 million), according to a Securities and Exchange Commission filing.
The Hamilton, Bermuda-based reinsurer said it will apply to list its common shares on the New York Stock Exchange under the symbol "FSR".
The company's core business is providing property catastrophe reinsurance coverage to selected insurance companies and other reinsurers, primarily on an excess-of-loss basis. The policies provide coverage for claims arising from major natural catastrophes, such as hurricanes and earthquakes, in excess of a specified loss.
The company's growing specialty lines segment covers risks such as aviation, energy, accident and health, satellite, marine and workers' compensation catastrophe.
The company began operations in December 2005 and was assigned a financial strength rating of "A-" from Oldwick, New Jersey-based A.M. Best Co. Inc.
Through the first six months of this year, ending June 30, the company had $214.1 million in gross premiums written, of which $160.5 million was property catastrophe reinsurance. The company's net income was $31.8 million on revenues of $64.6 million in the first half of 2006.
By Gloria Gonzalez
Happy New Year as FSA approves ISPVs
[LONDON]The Financial Services Authority, the United Kingdom's insurance supervisor is to start accepting applications for insurance special purpose vehicles from November, following approval of proposals to make ISPVs more attractive.
In June, the regulator issued a consultation document in which it set out its proposals to make the United Kingdom an attractive domicile for ISPVs. These included a streamlined authorization process and simplified solvency rules.
ISPVs are typically used to issue catastrophe bonds or as sidecars. Usually located in tax-efficient offshore domiciles such as Bermuda and Dublin, ISPVs allow capital market investors to offer insurers additional reinsurance capacity.
The FSA board has now made the rules that will permit ISPVs to be used by insurers for the December 31, 2006 year-end. Following the FSA board's decision, the regulator will accept completed applications for ISPVs from November 6, 2006. The fee for ISPV applications is £5,000.
"Firms that wish to take advantage of an ISPV to reduce their regulatory capital requirements by transferring risks to the ISPV will need to apply to the FSA for a waiver in order to do so," the supervisor said in a statement.
In June, Thomas Huertas, FSA director for wholesale firms, said: "The implementation of the Reinsurance Directive (2005/68/EC) gives the FSA an opportunity to make the United Kingdom an easier place for insurers to do business in. Introducing ISPVs will give insurers and reinsurers access to more diverse sources of capital and enable them to manage their capital more efficiently."
By Stuart Collins
Future of Quanta's Lloyd's unit secured
[LONDON]Quanta Capital Holdings Ltd. has formalized an agreement with Chaucer Holdings P.L.C. to secure the future of its Lloyd's of London business. Quanta placed all of its non-Lloyd's business into runoff in May this year.
In June, the Hamilton Bermuda-based insurer signed a provisional agreement with London-based Chaucer and the senior underwriting team of multiline syndicate 4000 to establish a new managing agency, Pembroke Managing Agency Ltd., to take over the running of the syndicate. This agreement, which includes a commitment from both parties to provide capital to syndicate 4000, has now been formalized.
In a statement, Chaucer confirmed that the capital required to support the syndicate in 2007 has now been secured. Under the terms of the agreement, Chaucer and Quanta have also committed to provide capital to syndicate 4000 until 2009.
"Chaucer and Quanta plan to work together closely to continue to diversify the provision of capital to the syndicate to support its presence and profitable growth in the Lloyd's market," Quanta said in a statement.
Mark Wheeler, active underwriter of syndicate 4000 said: "I am very excited about the prospects for syndicate 4000.
"Through securing our long-term capital, we have also demonstrated our ability to provide continuity to clients.
By Stuart Collins
Reliance Europe gets scheme approval
[LONDON]Reliance National Insurance Company (€urope) Ltd. has entered into a solvent scheme of arrangement, having received approval from the English High Court late last week.
RNICE was the London-based European subsidiary of Philadelphia-based Reliance Insurance Co., which went into runoff in 2001 when the company was subject to a rehabilitation order by the Pennsylvania insurance commissioner.
In spite of opposition from some policyholders, the majority of creditors of RNICE approved the proposed scheme of arrangement at a meeting in February this year. The Court approval of last Friday went through unopposed, as several policyholders had either withdrawn their opposition or had since commuted their policies with RNICE.
With the final hurdle now overcome, the scheme became effective as of October 20, 2006.
Under the scheme of arrangement, no more claims will be paid to policyholders until they have submitted the relevant forms and due process is completed, according to Richard Whatton, chairman of RNICE.
Policyholders have until May 21 next year to claim for unpaid claims and incurred, but not reported claims. RNICE was acquired by Whittington Investments (Guernsey) Ltd., part of Singapore-based Whittington Group Pte. in October 2003.
By Stuart Collins
Munich Re granted CIS reinsurance license
[MUNICH, Germany]Munich Re Life Reinsurance Eastern Europe/Central Asia, part of Munich Re Group, has obtained a license from the Russian Federal Service for Insurance Supervision to conduct life reinsurance business in the Commonwealth of Independent States and specifically in Russia, Ukraine, Kazakhstan and Azerbaijan. Munich Re's subsidiary in Moscow is the first foreign company to receive a license to conduct life reinsurance business in the region, according to the Munich-based reinsurance company.
In a statement, Nikolaus von Bomhard, chairman of Munich Re's board of management said: "We seek to take advantage of the highly promising economic situation in the CIS states to further grow our life reinsurance business organically and profitably."
According to Munich Re, life insurers in the CIS states have recorded annual premium growth of more than 100% in the past four years. There is "huge potential for developing pension provision in Eastern Europe and Central Asia," Munich Re said in its statement, adding that with a local subsidiary, Munich Re can for the first time offer reinsurance solutions on a rouble basis.
By Stuart Collins