Odyssey Re pays US$43 million for Opus Re

Fairfax’s Odyssey Re Holdings has paid US$43 million to buy all of the stock in Overseas Partners Ltd.(OPL)’s U.S. reinsurance operation, Opus Re.
OPL went into run-off in February 2002, in a bid to protect shareholder value the majority of its shareholders are employees of United Parcel Service and the operation began in 1983 as a shipping reinsurer.
Opus Re, based in Delaware, recently announced it would cease writing new business in the U.S. As of March 31, 2004, Opus Re had total assets of US$248 million and loss reserves of US$161 million.
Odyssey Re expects the deal to close at the end of the third quarter, 2004, subject to regulatory approval.
Last year, Odyssey Re bought a SCOR’s shell operation, General Security Indemnity Company, which it re-named Hudson Specialty with plans to run it as a national p&c surplus lines writer in the U.S., as well as the main platform for the new Hudson Healthcare segment.
Tuesday, A.M. Best affirmed the financial strength rating of Odyssey Re at “A” (excellent). The rating makes no mention of the Opus Re purchase. A.M. Best is maintaining its negative outlook on the rating, as it has all of Fairfax’s subsidiaries, on concerns over the parent company’s debt levels and reduced financial flexibility.