Canadian Underwriter

Ironshore Insurance formed in response to U.S. market dislocation

January 3, 2007   by Canadian Underwriter

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Ironshore Inc. has raised more than US$1 billion through a private placement of its equity securities, and it will begin underwriting specialty lines of insurance immediately through its Bermuda-based insurance subsidiary, Ironshore Insurance Ltd., the company has announced.
“This newly formed global insurance company was created in response to the crisis conditions in the U.S. property catastrophe insurance markets, a result of unprecedented hurricane activity in recent years and subsequent changes in the insurance industry that make such coverage capital intensive and much more costly,” the company announced in a release.
Robert and John Clements, who were instrumental in raising capital for the global brokerage firm Integro (which has offices in Toronto and Montreal), are the founders of Ironshore Inc.
Ironshore management and staff will be based in Bermuda, led by Robert V. Deutsch as CEO and Leslie J. Rock as president and chief underwriting officer.
Initially, Ironshore will write a worldwide book of property business.
“In the wake of Hurricane Katrina and other notable catastrophic events over the past two years, tens of billions of dollars have flowed into the reinsurance sector, but to date, permanent, adequate capacity has not been established on the insurance side,” stated Deutsch. “Ironshore is very pleased to be able to provide significant new insurance capacity with a substantial, unencumbered capital base and a proven, strong management team.”
Because of marketplace demands, the company’s initial focus will be on commercial risks with wind exposures in the catastrophe-prone coastal states such as Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Texas, as well as the Caribbean and Yucatan Peninsula. Ironshore will also provide commercial earthquake coverage in California.
Ironshore founding investors include:
BSMB, a private equity affiliate of The Bear Stearns Companies Inc. (NYSE: BSC);
Corporate Partners II, a private equity fund;
Fremont Partners, a private investment partnership;
TowerBrook Capital Partners, L.P., a private equity firm; and
Tara Investment Partners LLC, by Robert and John Clements.

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