Endurance Buys The Hartford's Re Biz
NU Online News Service, May 16, 2:15 p.m. EDT?The Hartford Financial Services Group Inc.?which announced this week its decision to exit its property-casualty reinsurance business offered through HartRe?said today it has sold most of its reinsurance unit to Endurance Specialty Holdings.
This newly disclosed transaction, The Hartford said, includes the sale of renewal rights for existing business as well as the transfer of the majority of the unearned premium reserves beginning last month.
The Hartford, Conn.-based company has been writing reinsurance for 30 years under several different names but most recently under the name HartRe.
Last year, the company said, HartRe wrote more than $700 million in treaty and facultative reinsurance. The Hartford added that, to facilitate the transaction, it will continue to service the business for a period of time. The company will also handle the retained business in a runoff.
The Hartford had announced last Monday, when it made public its asbestos study results and the $2.6 billion asbestos-related reserve strengthening (See NU Online News Service, May 12), that it will exit reinsurance. The Hartford noted that its HartRe lacks the necessary scale to compete effectively.
Commenting on the transaction, Ramani Ayer, chairman and chief executive officer at The Hartford, noted the current business at HartRe is well underwritten and well priced. "We feel that a professional reinsurer such as Endurance will be able to build off the strong platform we've created," Mr. Ayer said in a statement.
Endurance, which is based in Bermuda but has additional offices in New York City, White Plains, N.Y., and London, said it has offered employment to many of HartRe's claims, underwriting and actuarial professionals.
"We are extremely pleased to have reached agreement with The Hartford in this acquisition and welcome the new HartRe employees to Endurance," Kenneth J. LeStrange, chairman and chief executive officer at Endurance, said in a statement.
"We performed extensive due diligence and individual account level reviews of the business that we are assuming," he said. "The business had been very heavily re-underwritten in recent years by HartRe's current management team, and they had developed a very attractive book of profitable working layer reinsurance that we built our company to pursue."
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