Bulk of marine and personal accident business will go to new operation

Arch Insurance Company is to transfer a large proportion of its business to its own newly established Lloyd’s syndicate.

Arch will move the lion’s share of its marine and personal accident business to Syndicate 2012.

It will also transfer part of its property and professional lines to the managing agent, Arch Underwriting, throughout the year.

All the capacity for the syndicate, which will begin underwriting on 1 April, is provided solely by Arch.

Arch announced its involvement in Lloyd’s on Monday, although it had been in negotiations with the market for some time.

Mark Lyons, chairman of Arch Worldwide Insurance, said: “The establishment of a Lloyd’s platform represents an important strategic addition to the Arch global distribution base.

“Because of its strong global brand, licence base and extensive infrastructure, Lloyd’s is uniquely positioned for the development of key international business as well as the expansion into new and emerging markets.”

The company did not give Insurance Times any indication of how much capacity it would provide for the syndicate or any targets for gross written premium.

William Beveridge of Arch Insurance Europe will take on the role of active underwriter of Syndicate 2012.

He said Arch would not use Lloyd’s as a growth strategy for the business in its first year as market conditions needed to improve first.

There were signs of a hardening across a number of classes; Arch was optimistic the trend would continue, he said.

James Weatherstone, currently president and chief executive of Arch Insurance Europe, will be chief executive of the managing agent and David Hipkin will become director of underwriting. He is currently chief underwriting officer of Arch Insurance Europe.

Whittington Group provided advisory and consultancy services to Arch to support the managing agent and the syndicate.

Lloyd’s is being seen by many as a safe haven in the economic crisis.

Despite Lloyd’s underwriters suffering battered balance sheets, few have any exposure to toxic debt and insurers are also expecting a hardening market to bolster rates.

Private investors are increasingly investing in Lloyd’s under a limited liability capacity. In December last year, Amlin’s new Syndicate 6106 raised £50m in just a few weeks.