Consolidation in the international insurance market is set to continue after Ariel Re became the latest major Bermudan reinsurer to take a stake in Lloyd’s.
The reinsurer, which has $1bn of capital backing and is led by industry veteran Don Kramer, bought Lloyd’s managing agent, Atrium Underwriting, in a deal worth £193m.
It is the second takeover by a Bermudan company in as many months after Validus Re completed the sale of Talbot Underwriting for an estimated £200m.
Kramer, whose company was also linked with a bid for Talbot, admitted that Lloyd’s was “an attractive place” for all Bermudan-type entities.
He said: “For Bermudan companies operating from Bermuda, Lloyd’s gives you access to market, access to a derivative rating and access to gearing, all of which are valuable for diversification.
“Atrium’s diversified mix of property and casualty business and access to the Lloyd’s market makes it a highly complementary addition to Ariel,” added Kramer.
In recent weeks Montpelier Re and Bermudan life insurer, Sagicor, have also set up operations in the Lloyd’s market, with speculation that Canopius, the Lloyd’s insurer, is a £250m takeover target of Bermudan outfits.
Meanwhile, Christine Dandridge, active underwriter of Lloyd’s Syndicate 609 and an executive director of Atrium Underwriting, will step down at the end of this year to take early retirement.
Richard Harries, who has been the energy underwriter and a senior member of Syndicate 609 management since joining Atrium in 1997, will lead Syndicate 609’s underwriting team from 1 January 2008.
Dandridge denied that her decision was connected with Atrium’s sale to Ariel and insisted she would remain involved in the combined company on a part-time basis.