Chaucer plans new Class 4 island reinsurer
Chaucer has applied to the Bermuda Monetary Authority to form a new Class 4 reinsurance company.
The Lloyd’s insurer, which is owned by China Re, made the application through its Ireland subsidiary Chaucer Insurance Company DAC and is awaiting approval from the regulator, a spokeswoman for Chaucer confirmed to The Royal Gazette.
She declined to give further details.
The news follows reports in June from British trade publications that Ark, another Lloyd’s syndicate, plans to pump more capital into its existing Class 3 reinsurer in Bermuda to upgrade it to a Class 4 entity.
Under the BMA’s licensing regime, Class 4 is the category for the largest exempt international re/insurers and requires licensees to maintain minimum capital and surplus of $100 million.
Insurers have been raising capital to take advantage of a hardening market. Richard Brindle, chief executive officer of Fidelis, said last month that the drivers include three years of heavy catastrophe losses, a casualty crisis brought about by years of inadequately priced risk, the Lloyd’s market clamping down on underperforming syndicates, trapped capital in the insurance-linked securities market and pullback by large US insurers releasing demand in the market.
Losses related to the Covid-19 pandemic — and the uncertainty over the extent of exposures — may also help to sustain the hard market.
In addition to operating Lloyd’s syndicates 1084 and 1176, Chaucer also has operations in Dublin, Copenhagen, Singapore, Dubai and Miami.
Three years ago, Chaucer launched a reinsurance sidecar called Thopas Re in Bermuda to provide collateralised capacity for Syndicate 1084.
In 2018, Chaucer was sold by US insurer The Hanover to China Re in a $950 million deal. As a result of the transaction, Chaucer became the managing agent for China Re’s Syndicate 2088.
Take Our Poll
- "With Kathy Lynn Simmons becoming an MP, which Cabinet minister is likely to get the chop?"
- Lt-Col David Burch (Public Works)
- Lovitta Foggo (Community Affairs, Sport)
- Wayne Furbert (Cabinet Office)
- Jason Hayward (Labour)
- Renee Ming (National Security)
- Diallo Rabain (Education)
- Neville Tyrrell (Transport)
- Kim Wilson (Health)
- Total Votes: 1463
- Poll Archive