German reinsurance firm Hannover Re is capitalising a newly established Special Purpose Arrangement at Lloyd’s to enhance the capacity available to Argenta Syndicate 2121.
Argenta Holdings Ltd., now a subsidiary of Hannover Re since the reinsurer bought the Lloyd’s managing agency and private capital specialist, owns the vehicle, and its managing agency subsidiary Argenta Syndicate Management Ltd. has received approval from the Lloyd’s Franchise Board to establish SPA 6134, which will be managed alongside Syndicate 2121.
The SPA is sponsored and capitalised by Hannover Re and will act as a quota share facility, like a sidecar, reinsuring business underwritten by Syndicate 2121.
Syndicate 2121 will act as the host syndicate for the SPA and will retain at least 10% of the business introduced by the sponsor.
The SPA will underwrite for the 2018 and possibly future years of account, as Hannover Re seeks to add capacity support to its new Lloyd’s operations through the quota share arrangement.
For 2018 the SPA targets gross written premium income of £36 million across a number of classes of business, which will be dictated by the underwriting capability of the host syndicate.
Andrew Annandale, Chief Executive of Argenta, commented on the news, “SPA 6134 will provide ASML with greater flexibility to react to changing market conditions and allow Syndicate 2121 to take advantage of new opportunities following Argenta’s acquisition by Hannover Re and the very significant losses experienced by the market during 2017.”
