The U.K.’s Omega Underwriting Holdings PLC, a leading Lloyd’s insurer (Syndicate 958), has announced plans to raise £90 million ($157 million), both to increase syndicate capacity and to support the establishment of a new Bermuda-based insurer and reinsurer. The company also announced an interim dividend of 3.5 pence (6.125 cents) per share.
Concerning Syndicate 958, Omega indicated the following:
— Market expected to strengthen significantly in Omega’s key lines of business
— Approval received for increase in Syndicate 958 capacity from £225 million [$393.5 million] for the 2005 year of account to £250 million [$437 million] for the 2006 year of account – growth focused in Omega’s long-established core areas
— Omega’s own direct support for Syndicate 958 to increase for 2006
— Negligible impact to Omega’s results for 2005 from Hurricanes Katrina, Rita and Wilma
— Estimated cost of Hurricane Katrina remains unchanged. Hurricanes Rita and Wilma estimated to generate only modest net costs to the Syndicate
Concerning the establishment of the new company, Omega indicated that it intends to use the bulk of the proceeds from the capital raised as well as “the majority of Omega’s existing cash balances” to fund the initial capitalization of a new insurance and reinsurance company in Bermuda, proposed to be called Omega Specialty Insurance Company Limited.
The company indicated that it’s currently seeking the approval of the Bermuda Monetary Authority “to underwrite a portfolio of predominantly short-tail lines of business in which Omega has proven experience and expertise.”
Omega’s Chief Executive Richard Tolliday commented: “Omega and Syndicate 958 enjoy a long-standing record of excellence in underwriting performance. This has been achieved by always seeking to capitalise on our key strengths. Hurricanes Katrina, Rita and Wilma will have a negligible effect on Omega’s 2005 results. The net proceeds of this placing will enable Omega to seize the extraordinary opportunities created by the profound impact on the insurance industry of those hurricane losses.
“We look forward to 2006 and beyond with enthusiasm and confidence and believe that our approach of building on solid foundations and growing only in our core areas of expertise has the potential to generate very good returns in both the Syndicate and the new Bermuda business.”
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