Endurance Specialty Insurance Ltd., the Bermuda-based p/c insurer established by Aon, Zurich Financial Services and other investors, has reached a definitive agreement to acquire the property catastrophe reinsurance business of LaSalle Reinsurance Limited, a subsidiary of Trenwick Group Ltd. The transaction is expected to close immediately.
Endurance will acquire LaSalle, also based in Bermuda, through a 100% quota share reinsurance agreement, with Endurance paying Trenwick a ceding commission of 25% and additional profit sharing of 50% if losses do not exceed a 45% loss ratio. Endurance will have the right to renew LaSalle’s in-force business as it expires in exchange for a 12.5% commission on the business renewed.
LaSalle had $133 million of premiums in force in 2001, and as of April 1, 2002, it had approximately $60 million in net unearned premium reserves. 20 LaSalle employees have been offered positions at Endurance, potentially bringing its Bermuda-based staff to over 60.
Under the terms of the agreement, Endurance will assume 100% of in force property catastrophe business of LaSalle Re as of April 1, 2002, but will not take on any past liabilities from LaSalle Re.
Kenneth J. LeStrange, CEO and President of Endurance, stated that “We are very pleased to have reached this agreement with Trenwick, and, in so doing, to have completed the build-out of our property catastrophe and Bermuda platforms within just five months of our founding. This carefully considered transaction makes Endurance a powerful resource for our clients — combining the talented employees and impressive client base of LaSalle Re with Endurance’s strong capital base, broad array of products, experienced management team and strong investor group.”
James F. Billett, Jr.,Trenwick’s Chairman, President and CEO? noted that “The transaction immediately provides Trenwick with greater financial flexibility and reduces significantly our exposure to the volatility and significant capital requirements inherent in the property catastrophe business.”
Neither company commented on the amount of any additional consideration to be paid for the transaction.
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