Arch Capital Group Ltd. [Nasdaq:ACGL] announced today that Watford Re Ltd., a newly-formed multi-line Bermuda reinsurance company, launched operations with $1.133 billion of capital. Arch Underwriters Ltd., a subsidiary of ACGL, will act as Watford’s reinsurance manager, and Highbridge Principal Strategies, a subsidiary of JPMorgan Chase & Co., will manage Watford’s investment assets, each under a long term services agreement. Watford Re is a licensed Class 4 insurer by the Bermuda Monetary Authority and has received an “A-” (Excellent) financial strength rating from A.M. Best. Watford Re’s strategy is to combine a diversified reinsurance business with a disciplined investment strategy comprised primarily of non-investment grade credit fixed income assets.
The initial capitalization of Watford Re’s parent, Watford Holdings Ltd., consists of $907 million in common equity and $226 million in preferred equity. ACGL, through a subsidiary, invested $100 million and acquired approximately 11% of Watford Holdings’ common equity and a warrant to purchase additional common equity. John Rathgeber, previously Vice Chairman of Arch Worldwide Reinsurance Group, was named CEO of Watford. In addition, Marc Grandisson, Chairman and CEO of Arch Worldwide Reinsurance and Mortgage Groups, and Nicolas Papadopoulo, Chairman and CEO of Arch Reinsurance Ltd., were appointed to the board of directors of Watford.
Marc Grandisson commented, “Our ability to solve the needs of our clients is enhanced through adding Watford Re’s capabilities to our existing range of product offerings. We look forward to working closely with our broker partners and clients to create innovative products and structures not available in today’s traditional reinsurance market.”
About Arch Capital Group Ltd.Arch Capital Group Ltd., a Bermuda-based company with approximately $6.55 billion in capital at December 31, 2013, provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries. Cautionary Note Regarding Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward−looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may include forward−looking statements, which reflect our current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward−looking statements.