Arch Re has entered into a $400mn legacy deal with run-off giant Catalina to reinsure its book of US specialty casualty exposures and program business, the Bermudian announced today.
Arch Re said it had assumed the liabilities over time from its sister company Arch Insurance which had ceded the business through an internal reinsurance transaction.
The deal will see Catalina take over claims handling for the business which dates back to the early years of Arch Insurance from the turn of the Millennium.
“As part of our normal risk management practices, Arch continuously reviews potential solutions available to protect us against the downside risk from our run-off portfolios,” the chairman and CEO of Arch’s worldwide insurance group Nicolas Papadopoulo said.
The executive, who is also Arch’s chief underwriting officer for property and casualty, added:
“Going forward, this transaction will both provide capital relief and allow management more time to support further growth of our insurance platform and underwriting activities.”
News of the transaction comes just months after Arch rival RenaissanceRe inked a deal to take a a minority stake in Catalina. That deal followed hot on the heels of an announcement by investment powerhouse Apollo that it had taken a controlling stake in the run-off giant.
Since then, Catalina has acquired a 5 percent holding in beleaguered Bermudian reinsurer and AmTrust sister company Maiden.