Initial investors in DaVinci are expected to include State Farm Mutual Automobile Insurance Company (with a $200 million capital contribution) and RenaissanceRe (with a $100 million capital contribution), with the remainder provided by other investors.

The company is due to open it doors in November, said Martin J. Merritt, vice president-finance for RenaissanceRe Holdings in Bermuda.

“The purpose of the vehicle is to try to meet the demands for capacity that have been caused by the World Trade Center [disaster],” he told the National Underwriter.

“We are extremely pleased to be partnering with State Farm on this second venture,” said James N. Stanard, chairman, president and chief executive officer of RenaissanceRe Holdings, in a statement.

“DaVinci Re will offer side-by-side participation with RenaissanceRe quotes, similar to the continuing arrangement with OPCat,” he said. “In conjunction with the OPCat and DaVinci Re managed ventures, RenaissanceRe will offer capacity of $200 million per program from three strong reinsurers with over $2 billion in total capital.”

Mr. Merritt said brokers like to have more opportunities to place coverage, which gives them a degree of comfort.

Many observers view the current market as a good time to be starting up new companies. Mr. Merritt agreed but said it will be easier for established companies and tougher for new entries.

“The capital is easier to come by than the talent,” he said. “It would be difficult to get the right people into the company and get it started to write business before the Jan. 1 renewals.”

Like OPCat, which is owned by Overseas Partners Ltd., DaVinci Re will be managed by Renaissance Underwriting Manager, a wholly-owned subsidiary of RenaissanceRe Holdings.

Renaissance Underwriting Managers also manages Top Layer Re, another joint venture with State Farm, which has $4 billion in capacity available for high-layer reinsurance and retrocessional coverage, according to Renaissance Re. RenaissanceRe and State Farm each own half of Top Layer Re.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, October 15, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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