Bermuda-based Carvill, one of the largest privately-owned international reinsurance brokerages, is going out of business next year, National Underwriter has learned.

Rory Carvill, chairman of the parent company R.K. Carvill (International Holdings) Ltd., cited rising costs and economic conditions when notifying clients in a letter written yesterday that the 31-year-old concern “will not place or renew any treaty reinsurance business” after April 1, 2009.

Besides R.K Carvill, the firm has operations in Bermuda and London that deal in specialty products coverage, including medical malpractice, directors and officers, errors and omissions liabilities, major property-catastrophe, and financial products, including retrocessional business.

In the past, the firm has bragged that it uses innovative and sophisticated modeling tools that optimize the reinsurance decision-making process.

In his letter, Mr. Carvill said that in the past few years, “despite radical review of our internal operations, we have been unable to keep pace with the external changes affecting our industry.”

He said that even with a reduced operation, which he had informed clients of last month, “we are not confident that we can arrest this situation in the future.”

“Corporate size, reciprocal trading, escalating central costs and current economic conditions have fundamentally changed the nature of the business and our outlook on the future,” he said.

Mr. Carvill added it was “interesting to note that seven of the 10 largest reinsurance brokers in 1990 are no longer operative, and the remaining three are the largest and have massive retail accounts.”

While Carvill will cease renewing or placing business after April 1, Mr. Carvill reassured clients that the firm “will retain appropriate staff to ensure that all of our existing obligations are assiduously complied with, and we will assist in every way that we can to facilitate the orderly and sensible transition of your business to your chosen broker.”

In addition to thanking clients that had shown “fantastic support over the years,” Mr. Carvill promised to “expend every effort to ensure that you are inconvenienced as little as possible and your interests are protected as we work with you in making this transition.”

A New York-based spokesperson for the firm, Kathleen Ferrari, confirmed via e-mail that “Carvill will not place or renew any treaty reinsurance business after April 1, 2009,” but added that “the firm is not arranging media interviews at this time, and I do not have additional information to provide you.”