Tower Group has entered into a strategic relationship with CastlePoint a Bermuda-based holding company that it has sponsored.
CastlePoint has been capitalised with $265m and is now able to provide reinsurance, insurance products and insurance company services to the property and casualty insurance industry.
Michael Lee, who is to serve as chairman, chief executive officer and president of CastlePoint and Tower Group said: "This relationship will allow us to take advantage of growth opportunities from various sources, including from territorial expansion and potential acquisitions, while giving us the flexibility to effectively manage our capital to maximize shareholder value.
"This strategic initiative is especially important given the uncertainty in the reinsurance market created by the regulatory scrutiny concerning the use of finite reinsurance and the reduced availability of traditional quota share reinsurance and insurance risk sharing capacity."
Lee added: "Our relationship with CastlePoint also allows us to maintain focus on the brokerage business that we have historically underwritten utilizing our underwriting staff through our retail and wholesale agents as well as program business for limited classes of business that we began writing in 2005.
"We will also be able to participate in specialty program business for classes of business that we have not historically written through our relationship with CastlePoint."
