May 20, 2003 by Canadian Underwriter
Just days after the announcement that The Hartford would exit p&c reinsurance, a buyer for part of the business has been found. Bermuda-based Endurance Specialty Holdings Ltd. says it has bought the majority of HartRe’s in-force p&c reinsurance business.
Endurance acquires renewal rights to a select group of contracts equaling U$400 million of unearned premium reserves as of April 1. Past loss reserve liabilities of HartRe are not part of the purchase.
It is unknown what degree of Canadian business, if any, is included in the transaction. However, the business seems largely U.S.-oriented, to be reinsured by Endurance Reinsurance Corp. of America and with a “significant number” of HartRe staff offered employment at Endurance Re America.
“We performed extensive due diligence and individual account level reviews of the business that we are assuming,” explains Endurance chairman, CEO and president Kenneth LeStrange. “The business had been very heavily re-underwritten in recent years by HartRe’s current management team and they had developed a very attractive book of profitable working layer reinsurance that we built our company to pursue.”
The book is made up of 38% property, 22% aviation, 17% casualty treaty, 6% non-standard auto treaty, 5% property catastrophe and 12% other reinsurance. Compensation will be based on several factors including the ultimate premiums received, although at closing, Endurance made guaranteed minimum payments of US$25 million against future over-ride and renewal rights payments.