Overseas Partners Ltd (OPL) has decided to stop underwriting new business immediately and put its Bermuda operations - OP Re, OPAL and OP Finite - into run off.
OPCat policies are being taken over by Renaissance Re and the OPL board is currently in discussions about selling OPUS Re, its US reinsurance operation. It is also discussing moving the Bermuda finite and accident and health underwriting teams to other organisations. OPL has approximately $1.3 billion in capital.
The decision to cease operations follows an independent review by two actuarial/consulting firms. OPL commented today: "Following its strategic alternative reviews, the board has concluded that despite its management and reserve strengths, OPL's current captial structure will not allow it to continue to grow and compete effectively in today's reinsurance market."
OPL's decision appears to fly in the face of the current trend of increasing underwriting commitments in the hard market. Bermudian-based carriers including ACE, XL and Renaissance Re have recently raised substantial funds from share issues, while a number of new players, including Axis Specialty, Endurance and DaVinci have entered the market in recent months.
Within the past couple of years, a new top management team had appeared to be turning the company around. Chairman of the board of OPL, Robert Clanin said: "Many respected reinsurance professional joined OPL to help build value for shareholders. This decision to stop writing business was very difficult given the fine job that they have done to begin rebuilding OPL."
