December 7: Business Briefs

WEDNESDAY, DECEMBER 7: Chartis announced it has entered into a reinsurance transaction with Compass Re, which will provide $575 million of protection to Chartis against US hurricanes and earthquakes.

This represents a substantial increase from the $275 million of protection originally sought by Chartis.

To fund its obligations to Chartis, Compass Re issued a catastrophe bond in three tranches – $75 million of Class 1 notes, $250 million of Class 2 notes and $250 million of Class 3 notes.

The transaction closed on December 1, 2011 and provides Chartis with fully collateralized coverage against losses from U.S. hurricanes and earthquakes on a per-occurrence basis (under a reinsurance agreement related to the Class 1 notes) and a second and subsequent event aggregate basis (under reinsurance agreements related to the Class 2 and Class 3 notes) through December 2014.

This transaction follows Chartis’ two reinsurance transactions with Lodestone Re in 2010, which provided a total of $875 million of protection to Chartis, fully collateralized through catastrophe bonds issued by Lodestone Re, against U.S. hurricanes and earthquakes.

Peter D. Hancock, CEO of Chartis, said: “We are pleased to be able to again obtain reinsurance supported by capital markets instruments as a mechanism to efficiently supplement and diversify Chartis’ risk management framework.”

Compass Re is a special purpose insurer, incorporated under the laws of Bermuda, which has established a programme structure enabling potential future catastrophe bond issuances.

Brooks III joins Validus

J. Paschal Brooks III has joined Validus Managers Ltd. as an executive vice president and the portfolio manager for the AlphaCat funds.

Formed in 2008, Validus Managers currently manages over $400 million in investor capital, focused on first-tier and retrocessional reinsurance and catastrophe bonds through a range of AlphaCat branded vehicles

Mr Brooks most recently worked as a vice president in the structured finance group within the investment banking division at Goldman, Sachs & Co. Previously, he had worked as a research analyst at Alleghany Corporation. He is a graduate of Duke University and a CFA charter holder.

Decker joins AXIS

John Van Decker is the new executive vice president and head of North American professional lines for AXIS Capital Limited..

In this newly created position, Mr. Van Decker is responsible for oversight of AXIS Insurance’s professional lines underwriting units in the US and Bermuda. He is based in Berkeley Heights, NJ, and reports to Jack Kuhn, chief underwriting officer of AXIS Insurance and global practice leader, AXIS Professional Lines.

Mr. Kuhn said: “John has extensive experience leading professional lines insurance operations and he is well respected in the industry.

“His expertise and unwavering focus on underwriting excellence fit in well with our management team.

“I am confident that John will be instrumental in helping us further enhance our position in the professional lines marketplace.”

Mr Van Decker joins AXIS Insurance from Catlin US where he developed and led various professional liability and management liability lines.