The St Paul Companies have confirmed that ongoing reinsurance operations will be transferred to a newly-formed Bermuda reinsurer, Platinum Underwriters Holdings Ltd.
The new reinsurer is expected to offer 75.1% of its shares to the public in a bid to raise $1bn (£0.7bn).
The St Paul will also transfer certain renewal opportunities and related assets of its reinsurance unit, St Paul Re, for a 24.9% stake in the new company, which will have 9.9% of the voting rights.
At the time of the closing of the offering, Platinum will reinsure the St Paul Fire and Marine Insurance Company and St Paul Reinsurance Company Limited for certain reinsurance contracts incepting in 2002.
Chairman and chief executive Jay Fishman commented: "This transaction is yet another step to improve the competitive positioning of The St. Paul.
"In addition to enhancing the competitive positioning of our reinsurance operations, it will, over time, free up capital to build our core commercial lines, speciality property and casualty, and asset management businesses."
The offering is expected to within three months, subject to regulatory approval.
