New Bermuda insurers to handle Florida hurricane risks (Update 1)

SATURDAY, JUNE 2: Bermuda reinsurance firms have formed new companies to handle different lines of insurance.

RenaissanceRe Holdings Ltd.on Friday announced the formation of Timicuan Reinsurance III Limited ("Tim Re III"), a new Bermuda reinsurance company, creating additional reinsurance capacity for the Florida homeowners market.

Renaissance and DaVinci Reinsurance Ltd. have entered into a fully-collateralized reinsurance agreement with Tim Re III, under which Renaissance and DaVinci will cede to Tim Re III a defined portfolio of their property catastrophe business, covering primarily hurricane risks for Florida insurers during the 2012 hurricane season. Investors (including RenaissanceRe) have agreed to capitalize Tim Re III with approximately $55 million of equity capital.

Tim Re III will be managed by Renaissance Underwriting Managers, Ltd.

Neill A. Currie, CEO of RenaissanceRe said: "We are pleased to announce the formation of Tim Re III and continue our track record of working with the capital markets to provide additional reinsurance capacity.

“Through this endeavor, we are able both to serve our customers' needs and design a facility that allows investors to invest efficiently in the Florida reinsurance market."

Also on Friday, Validus Holdings, Ltd. announced it has joined with other investors in capitalizing AlphaCat Re 2012, Ltd. AlphaCat 2012 is a new special purpose reinsurer formed for the purpose of writing collateralized reinsurance with a particular focus on windstorm risks for Florida domiciled insurance companies.

AlphaCat 2012 has been funded with $70.0 million of equity capital.

Ed Noonan, chairman and CEO of Validus said: "AlphaCat 2012 reflects the continued expansion of Validus' franchise in the important property catastrophe reinsurance market.

“We are very pleased to be able to provide additional capacity to our customers, and with the level of support for AlphaCat 2012 provided by investors and intermediaries."

Validus Underwriting Services, Ltd. will underwrite business for AlphaCat 2012, for which it will be paid a commission for originating the business and a profit commission based on underwriting results.