Asia Capital Reinsurance Group (Asia Capital Re) and ArgoGlobal, the Lloyd’s insurer and member of Argo Group, have signed a Heads of Agreement to establish a Special Purpose Syndicate (SPS) at Lloyd’s to underwrite Chinese risks.
Subject to Lloyd’s and other regulatory approvals, the new SPS, which aims to begin underwriting for the 2016 year of account, will be managed by ArgoGlobal Managing Agency and will be supported by a Corporate Member capitalised entirely by Asia Capital Re.
Multi-class portfolio of Chinese business
Singapore-headquartered Asia Capital Re, which has a significant multi-class portfolio of Chinese business, said in a statement that under the new agreement, Lloyd’s China (ArgoGlobal division) will underwrite a selected proportion of this portfolio, with Asia Capital Re providing the underwriting expertise and local risk knowledge of the Chinese market.
The portfolio is anticipated to represent approximately GBP30-35 million (US$46.3-54 million) of Gross Net Premium in 2016. The new SPS will then underwrite an 80% quota share of this proportion, with the remaining 20% being retained by ArgoGlobal’s Syndicate 1200.
The diversified portfolio will mainly comprise existing facultative reinsurance and non-proportional treaty businesses including aviation and space, marine, property and engineering, casualty and trade credit.
“Partnership a milestone for ACR”
Mr David Harris, Managing Director of ArgoGlobal, said: “It is strategically important that, as a market, we continue to innovate to generate new, profitable business. This agreement marks a significant development for ArgoGlobal and brings genuinely new business to our market.
Mr John Tan, Group Chief Executive of ACR Capital Holdings, added: “This partnership represents a milestone for Asia Capital Re and is strong affirmation of our commitment to serving the China market. There is great synergistic potential between ArgoGlobal and Asia Capital Re in this innovative structure. We are very pleased to have forged this partnership which will enhance the profiles of all parties and encourage knowledge sharing. Most of all, through our combined force, we will be able to provide our China business partners with even more relevant and secure risk management support as the country continues on its economic growth trajectory.”
ArgoGlobal is the trading brand of Syndicate 1200 at Lloyd’s, managed by Argo Managing Agency. The Syndicate offers worldwide property, aerospace, marine, energy, specialty and non-US liability insurance.
Asia Capital Re is a wholly-owned subsidiary of ACR Capital Holdings, an Asia-dedicated risk solutions provider. It is headquartered in Singapore, with branches in Hong Kong and Dubai, representative offices in Taiwan, Japan, Korea, and Vietnam, and a liaison office in India.