Montpelier Re Holdings in Hamilton, Bermuda, said it is investing $133 million in a new Bermuda reinsurer, Blue Ocean Reinsurance Ltd, which will offer retrocessional protection in the property catastrophe market.
Together with commitments from other investors, Montpelier said Blue Ocean has been capitalized with commitments for $300 million of common and preferred equity.
According to Montpelier, Blue Ocean will provide fully collateralized retrocessional protection to parties other than Montpelier. With the support of such collateral for its retrocessional contracts, Blue Ocean has no current plans to obtain a rating from any rating agency, Montpelier said.
Initially, Blue Ocean anticipates underwriting gross aggregate policy limits in excess of $350 million.
Montpelier Agency Ltd., a subsidiary of Montpelier, will perform underwriting services for Blue Ocean.
John Bassett, a director of Montpelier Agency Ltd. and previously responsible for Montpelier's retrocessional business, will oversee the underwriting.
In a statement, Anthony Taylor, chairman, president and chief executive of Montpelier, commented: "We are extremely pleased to have completed this significant step in our announced plans to pursue non-traditional approaches to the management of our business. The separate capitalization of Blue Ocean will allow us to take advantage of favorable underwriting opportunities efficiently in what has become one of the most capital-intensive classes of reinsurance."
Montpelier Re Holdings Ltd., through its operating subsidiary Montpelier Reinsurance Ltd., provides global property and casualty reinsurance and insurance products. During the 9 months ended Sept. 30, 2005, Montpelier wrote $872 million in gross premiums written.
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