Hannover Re reorganizes US specialty business, launches new primary insurer

Hannover Re recently began restructuring its North American primary insurance business through the launch of the new specialty business insurer Praetorian Financial Goup Inc.
Approximately US$500 million in capital was contributed to the formation of Praetorian, which will write select specialty business that had previously been managed by Clarendon Insurance Group Inc.
Hannover Re says that premiums of approximately US$2 billion is anticipated to be generated by Praetorian in its first year of operation.
Moving forward, Clarendon will concentrate on the professional and proactive management of the approximately 200 terminated programs as well as existing commodity business falling outside of Praetorian’s focus.
“With this separation we have taken the last logical step as part of our restructuring measures geared to maximizing the value of our specialty insurance business group”, Wilhelm Zeller, chief executive officer of Hannove Re, says.
Rodman Fox, former chief executive of Benfield Group, will be the CEO of Praetorian. Fox says Praetorian will focus on higher-margin specialty lines such as the insurance of select niche automobile risks and unusual professional risks as well as risks involving art collections, health insurance for pets, mobile phones and jewelry businesses.
“By putting in place a clear distinction between the companies we have also kept open more options for the future of our specialty business,” Zeller says. “Over time we can consider continuing to manage Clarendon’s activities internally, engaging the services of additional external experts or moving towards more extensive outsourcing solutions and other alternatives.”