1st Sep 2006 07:01
Hiscox PLC01 September 2006 Creation of Hiscox Syndicate 33 dedicated reinsurer The board of Hiscox plc ("Hiscox") announces that, in order to take advantage ofexpected underwriting conditions, Hiscox Syndicate 33, which it manages and inwhich it has a 72.5% participation, is in discussions which could lead to thecreation of a new reinsurer which will only reinsure Hiscox Syndicate 33. Ifthe transaction proceeds investors will capitalise a newly established Bermudareinsurer which would enter into a quota share reinsurance arrangement withSyndicate 33 in respect of its 2007 and possibly the 2008 Lloyd's years ofaccount. The reinsurance treaty is likely to be for a fixed share of HiscoxSyndicate 33's own reinsurance account, though the final business mix has notyet been finalised. The new vehicle will be capitalised by a mixture of debt andequity. Hiscox will not be an investor in the new vehicle. Hiscox Syndicate 33 will benefit by earning ceding and profit commissionstypical in quota share arrangements. If the reinsurance transaction is notstructured as a Lloyd's Qualifying Quota Share, then it is likely that HiscoxSyndicate 33 will pre-empt its 2006 capacity of £833m by up to 10% for the 2007year of account. Hiscox and Lloyd's are in ongoing discussions on the finalstructure and the capital implications of the proposed quota share. HiscoxSyndicate 33 will be required to enter into customary indemnity and holdharmless arrangements with the various advisers to the new vehicle. Further details will be announced in due course. -ends- For further information: Hiscox plcBronek Masojada Chief Executive 020 7448 6012Stuart Bridges Finance Director 020 7448 6013 MaitlandSuzanne Bartch 020 7379 5151 Notes to editors Hiscox plc is a specialist insurance group listed on the London Stock Exchange.There are three main underwriting parts of the Group - Hiscox Global Markets,Hiscox UK and Europe, and Hiscox International. Hiscox Global Marketsunderwrites mainly internationally traded business in the London Market -generally large or complex business which needs to be shared with other insurersor needs the international licences of Lloyd's. Hiscox UK and Hiscox Europeoffer a range of specialist insurance for professionals and business customers,as well as high net worth individuals. Hiscox International includes offshoreoperations in Bermuda and Guernsey and Hiscox USA. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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