Watford Re Readies for business

Bermuda-based Watford Holdings Ltd. and its completely-owned subsidiary Watford Re Ltd. (collectively, “Watford” or the “agency”), a newly-shaped Bermuda-based multi-line reinsurer, introduced have announced that “it has raised capital and expects to start reinsurance operations quickly.

Watford is led by means of CEO John Rathgeber, a 30-yr reinsurance industry veteran, who was maximum lately the vice chairman of Arch global Reinsurance organization. Watford Re is licensed as a category four reinsurer through the Bermuda economic Authority.

In popularity A.M. first-rate Co. stated it has assigned a economic electricity score of ‘A-‘ (incredible) and provider credit score (ICR) of “a-” to Watford Re, each with stable outlooks.

satisfactory stated the “rankings are based totally on Watford’s robust chance-adjusted capitalization, experienced underwriting led by way of Arch Underwriters Ltd., a wholly owned subsidiary of Arch Capital organization Ltd., and Watford’s extensive-based business plan.”

As partial offsetting elements excellent mentioned the “start-up nature of the organization and the risks associated with a leveraged funding strategy in conjunction with competitive conditions in the reinsurance market which can challenge the execution of the marketing strategy.”

pleasant explained that it “believes that underwriting chance coupled with the leveraged funding approach creates an multiplied hazard profile that could divulge Watford on both the asset and legal responsibility sides of the balance sheet.” however, fine added, ‘the skilled underwriting of Arch Capital organization Ltd. and the skilled investment acumen of Highbridge foremost strategies, LLC (HPS), in conjunction with cash flows produced by Watford’s credit score funding strategy, will assist manages those dangers.”

first-rate additionally indicated that it “anticipates that Watford’s management will be challenged by competition from hooked up reinsurers as well as other begin-up entities and opportunity capital. The addition of greater ability to an already overcapitalized reinsurance marketplace may want to stress underwriting margins.

“Watford’s belongings can be managed through HPS, a subsidiary of Highbridge Capital management, LLC, a the big apple-primarily based SEC-registered investment marketing consultant. HPS has about $19 billion of property under management. Watford will own the person investments and preserve the belongings on its stability sheet. Watford’s property will not be comingled with any HPS-managed finances with other investors of HPS.”

In end best said: “Key rating triggers that might bring about positive score movements might be Watford assembly and/or exceeding its marketing strategy. bad rating moves may want to occur if Watford fails to execute its marketing strategy over the long term.”