Protected cell captive will allow Brit to retain more risk
Brit Insurance is to set up a small team of senior underwriters to work in Gibraltar to develop the reinsurance business of a protected cell company, Rockhampton Insurance PCC.
The insurer said it intends to use Rockhampton within its overall risk management framework to retain a selected part of the outwards reinsurance programmes of its two principal insurance operations, Brit Insurance Ltd and Syndicate 2987.
The cell will be offered to participate in the company's purchased quota share and excess of loss reinsurance programmes alongside its panel of external reinsurers and on equivalent terms from 2008.
Brit Insurance expects the cell to retain premiums and to increase its earnings per share over the medium term.
Dane Douetil, chief executive of Brit Insurance, commented: “As mentioned in our interim statement, we have conducted a thorough review of our reinsurance purchasing programme. The conclusion was that, in the light of the increasing scale, diversity and maturity of our underwriting portfolio, there is scope to increase our retention of non-catastrophe risk without compromising our overall risk appetite and without the need for additional capital. Gibraltar is an attractive location with numerous advantages, including the availability of PCC legislation, EU licensing, a favourable taxation regime and good access to London. Rockhampton will become a valuable addition to our asset and liability management toolkit.”
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