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LONDONBrit Insurance Holdings P.L.C. has reached an agreement to launch a joint venture Bermuda-based reinsurance company, Norton Re Insurance Ltd. to write catastrophe retrocession business.
The move overseas is the first for Brit, which operates at Lloyd's and through its London-based insurance company.
In a statement, Brit said that Norton Re has received its license from the Bermuda Monetary Authority and that it expects the Bermudian reinsurer will begin underwriting for the January 1, 2007, renewal.
Brit is the lead investor in Norton Re with a 19.6% holding, or $21 million initial investment. Norton Re will use the underwriting expertise of Brit's existing retrocession team operating from Hamilton, Bermuda.
The remainder of Norton Re's initial $107.7 million capital is provided by institutional investors.
Dane Douetil, chief executive officer of Brit, said: "We announced earlier in the year that we were investigating this new strategy and we are delighted by the high level of demand that we have seen from investors. As 2006 has progressed, terms and conditions and pricing in the retrocession market have strengthened further and we and our fellow investors regard this as the optimal time to launch the new carrier."
Earlier this month Advent Capital (Holdings) P.L.C. announced that it was in the process of establishing Advent Re, a Bermuda-based reinsurance company to write retrocessional business in time for the January, 2007, renewal.
Mr Douetil added that: "This will be our first investment in an offshore underwriting business and a further significant step in Brit Insurance's evolution into a widely diversified insurance group. We believe that this innovative structure is attractive to capital markets and is a potential blueprint that we can consider for other classes of business with similar characteristics."