Flagstone Re enters retro agreement

HAMILTON, Bermuda--Flagstone Reinsurance Holdings Ltd. has entered into an excess-of-loss retrocessional agreement with Monte Gele, a newly formed, Cayman Island-based single purpose vehicle.

Monte Gele financed the transaction through the issuance of catastrophe bonds, said a Flagstone Re spokesman. The reinsurer has $172.2 million in assets to cover liabilities under the arrangement, according to the company's earnings announcement.

The excess-of-loss agreement, which was announced July 26, is set to expire June 30, 2009.

Bermuda-based Flagstone also reported a 58% increase in net income, to $50.3 million, compared with last year's first half. Net premiums written increased 85%, to $380.1 million for the first half. The property catastrophe, property and specialty reinsurer posted an 84.9% combined ratio for the first half, compared with 60.8% for the same period a year ago.