A.C.E. Insurance Company, Ltd. (ACE) in conjunction with X.L. Insurance Company Ltd. (XL) and Overseas Partners Re Ltd. (OP Re) is pleased to announce that they have jointly reached agreement and have signed letters of intent for the formation of an airline underwriting consortium to be based in Bermuda.
The consortium is to be known as the
Airline Risk Consortium
(ARC) and will provide for the catastrophe insurance needs of the airline industry, covering their aviation, directors and officers, property and other related or associated exposures in a single policy form.
ACE and XL will each provide 40% of the consortium's capacity with the balance of 20% being provided by OP Re. Underwriting and management services will be provided and undertaken by ACE's existing Aviation Underwriting Operations supported by ACE's D&O and property divisions.
Dominic Frederico, President of A.C.E. Insurance Company, Ltd. stated that he was delighted by the formation of the consortium. "This consortium, the first of its kind in Bermuda, demonstrates ACE's commitment to respond to a perceived need and to provide new and innovative products," said Mr. Frederico. "It also shows that where there is a broader need for catastrophe protection, the island has the ability to harness its collective strengths to provide Bermuda-based solutions."
Gary Cooke, Senior Vice President and head of Aviation Underwriting for ACE, noted that the consortium will provide up to US$250 million in aggregate limits for each airline on either an annual basis or on a longer term basis. Sub limits will apply to certain of the coverages and while minimum attachment points will apply, these will relate to the individual operations of the airlines to be covered. The consortium has already received its first submission from AON on behalf of a North American client.
President and Chief Operating Officer of X.L. Insurance Company, Ltd. Robert Cooney, added, "The facility represents a continuation of our excellent working relationship with ACE. With the softness of rates in our traditional lines, Bermuda insurers need to introduce thoughtful products such as these that bring real value to the client."
Bruce Barone, President and Chief Executive Officer of OP Re and the Overseas parent company (OPL) said, "This is not our customary line of business; however, because of the unique nature of this product and the quality of the other participants, we are pleased to provide capital support to the venture and further support the Bermuda insurance market. The airlines should be pleased with the product and the security that stands behind it."
The ACE group of companies provides insurance and reinsurance for a diverse group of international clients. Operating subsidiaries are based in Bermuda, the United States, the United Kingdom (Lloyd's) and the Republic of Ireland. At June 30, 1998, ACE Limited had approximately $3.8 billion in shareholders' equity and approximately $8.0 billion in assets. ACE Limited is traded on the New York Stock Exchange under the ticker symbol ACL.
EXEL Limited, through its subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis. EXEL Limited has total shareholders' equity of approximately $4.9 billion and total assets of approximately $9.7 billion. EXEL Limited is traded on the New York Stock Exchange under the ticker symbol XL.
Overseas Partners Ltd. and subsidiaries, based in Bermuda, is one of the world's largest reinsurance companies with members equity of $2.4 billion. OPL provides coverage to the international community in the areas of shipper's risk, property, worker's compensation, aviation, marine, medical benefits, finite risk and other specialty reinsurance products. OPL also owns, manages and leases real estate properties valued at more than $1.5 billion. OPL maintains an investment portfolio valued at June 30, 1998 at $2.3 billion.