Catlin to Establish Swiss Reinsurer

June 29, 2010

The Bermuda-based Catlin Group Limited has announced that it intends to form a reinsurance company in Switzerland to “significantly expand the European-based reinsurance business underwritten by the Group.”

Catlin said it has applied to the “Swiss Financial Market Supervisory Authority (FINMA) to establish Catlin Re Switzerland. Subject to regulatory approval, Catlin Re Switzerland will have capital of at least US$1 billion from internal resources and will initially underwrite specialty reinsurance business for which market conditions are favorable.

“Catlin will also apply to the Bermuda Monetary Authority to establish a Bermuda-based branch of Catlin Re Switzerland. The Bermuda branch will initially underwrite reinsurance of various Catlin Group subsidiaries, business that is currently written by Catlin Insurance Company Ltd. (Catlin Bermuda). This will provide the Group with increased capital flexibility. Catlin’s existing Bermuda portfolio of open market insurance and reinsurance will continue to be underwritten by Catlin Bermuda.”

The bulletin described the formation of the Swiss reinsurer as a “major development in the Group’s European expansion strategy.” Although the “marketplace is currently competitive for most classes of European property/casualty business, the formation of Catlin Re Switzerland will allow the Catlin Group to quickly take advantage of favorable opportunities as they arise in the European reinsurance market, including opportunities created as the result of the forthcoming Solvency II regulatory regime,” the bulletin continued.

Catlin also indicated that it foresees improvements in European market conditions, and if these materialize it aims to “expand its portfolio of treaty reinsurance business, particularly concentrating on risks and areas of distribution that are not currently underwritten elsewhere within the Catlin Group. Catlin Re Switzerland will write selected classes of European specialist business for which market conditions are favorable.”

Catlin also announced that Paul Brand, Chief Underwriting Officer of the Catlin Group, will assume the additional role of Chief Executive Officer of Catlin’s European Operations. Ralf Tillenburg, currently CEO of Catlin’s European Hub in Cologne will soon become CEO-European Direct, as well as a CEO-European Reinsurance, reporting to Brand.

Catlin’s European insurance operations will report to Tillenburg in Cologne. Brand, as head of European Reinsurance, will be based in Zurich, and will be responsible for Catlin Re Switzerland as well as the existing reinsurance operations of Catlin’s European offices.

“The formation of Catlin Re Switzerland is a major step in Catlin’s European expansion, which began in 2003 with the opening of an office in Cologne,” the bulletin continued. “Catlin currently has ten European offices located in Cologne, Zurich, Antwerp, Barcelona, Bergen, Genoa, Innsbruck, Munich, Paris and Rome. These offices wrote US$175 million in gross premiums during 2009 on behalf of the Catlin Syndicate at Lloyd’s and Catlin UK.”

Stephen Catlin, Chief Executive of Catlin Group, noted that the new division would “significantly expand the Catlin Group’s presence in the European marketplace. Our ambition is to build Catlin Re Switzerland over time to become a leading European specialty reinsurer.”

He added that the “specialist classes of business to be initially underwritten by Catlin Re Switzerland will expand the portfolio of similar business now written by Catlin by focusing on high-quality European risks at a time when market conditions are favorable for these business classes. Catlin Re Switzerland will expand over time to write additional classes of business, in line with Catlin’s successful practice of organically growing international operations by attracting underwriting teams whose values and practices are in consistent with Catlin’s.”

When regulatory approval, which is anticipated in the second half of 2010, is received, Catlin Re Switzerland will “commence writing a portfolio of European reinsurance risks that are generally not underwritten by Catlin’s existing underwriting teams. The initial classes of business to be underwritten by Catlin Re Switzerland will include trade credit reinsurance, political risk reinsurance and surety reinsurance.”

Catlin has named Martin Hochstrasser and Markus A. Eugster as underwriting directors of Catlin Re Switzerland.

Hochstrasser was most recently Executive Director at EFG Financial Products in Zurich. He was previously a Managing Director at Swiss Re with key responsibilities in credit and surety reinsurance, trade finance, political risk and structured credit underwriting. He also held positions with Swiss Bank Corporation.

Eugster most recently was the Principal of MA Eugster Consulting, which held mandates for Atradius Italy and UK investment management firm Channel Capital Advisors LLP. He had previously held Managing Director positions with Swiss Re, including Global Head of Bank Client Relationships as well as Head of Origination and Business Development and Senior Underwriter in Swiss Re’s Credit Division. He has also held positions with Credit Suisse in Latin American commercial banking and structured trade and project finance.

Source: Catlin Group

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