Validus Reinsurance Ltd.==a Bermuda-based startup reinsurer backed by an investment group headed by former Marsh and McLennan Companies Chief Executive Officer Jeffrey Greenberg==announced its formal launch today with $1 billion in capital.
Validus Re said it has received a rating of A-minus (Excellent) from A.M. Best and is approved by the Bermuda Monetary Authority as a Class 4 reinsurer.
The company said it was formed in response to favorable market conditions that have followed large catastrophe losses for property-casualty insurers in 2004 and 2005.
The company said its underwriting strategy is to focus on creating a balanced, diversified portfolio of low-frequency, high-severity property and specialty business in the following classes: property per risk; property-catastrophe; property proportional; workers' compensation catastrophe; marine and energy; aerospace; marine war and aviation war; terrorism; and retrocession.
Validus Re said it has experienced underwriters, modelers and actuaries to handle each business class.
The company said its investment strategy will be conservative and designed to emphasize the preservation of invested assets and to provide liquidity for the prompt payment of claims.
The chairman and CEO of Validus is Edward Noonan, previously acting CEO of United America Indemnity and president and CEO of American Reinsurance Company. George Reeth, former chairman and CEO of Willis Re North America, has been appointed as president of Validus.
Validus Re is a wholly-owned subsidiary of Validus Holdings Ltd, incorporated in Bermuda. Aquiline Capital Partners LLC ('Aquiline'), a specialist financial services investment firm, is the founder and lead investor in Validus Holdings, Ltd.
Aquiline said its investment team is led by Mr. Greenberg, who has joined the board of directors. Mr. Greenberg was forced out as CEO at MMC in October 2004 after the company's Marsh brokerage arm was involved in a scandal over price-fixing and steering.
Other investors represented on the Aquiline board include Goldman Sachs, Merrill Lynch Global Private Equity, Vestar Capital Partners and New Mountain Capital.
Mr. Noonan, the new Validus CEO, said the venture has an exceptionally strong balance sheet.
"Our financial strength, combined with our A-minus rating from A.M. Best, provides us with a platform to provide meaningful capacity to the global market. The management, risk modeling and underwriting teams will provide a prompt and responsive service, timely payment of claims and customised reinsurance solutions for our clients," said Mr. Noonan.
Validus Re said it will conduct its operations and be managed and controlled from Bermuda.
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