Somers Group Holdings Ltd., through its subsidiaries, operates as a property and casualty (P&C) insurance and reinsurance company worldwide.
The company has operations in Bermuda, the United States and Europe. The company manages its insurance and reinsurance underwriting through its relationship with Arch (refers to one or more of various direct or indirect subsidiaries of Arch Capital Group Ltd. (ACGL)), which, through Arch Reinsurance Ltd. (ARL), is its major founding equity investors. ARL,...
Somers Group Holdings Ltd., through its subsidiaries, operates as a property and casualty (P&C) insurance and reinsurance company worldwide.
The company has operations in Bermuda, the United States and Europe. The company manages its insurance and reinsurance underwriting through its relationship with Arch (refers to one or more of various direct or indirect subsidiaries of Arch Capital Group Ltd. (ACGL)), which, through Arch Reinsurance Ltd. (ARL), is its major founding equity investors. ARL, which is a subsidiary of ACGL, a major global insurance and reinsurance company. ACGL provides a range of property, casualty and mortgage insurance and reinsurance lines, with a major focus on writing specialty lines on a worldwide basis through operations in Bermuda, the United States, Canada, Europe, and Australia.
The company’s major operating subsidiary is Watford Re Ltd. (Watford Re), a Bermuda-based company, which is registered as a Class 4 insurer with the Bermuda Monetary Authority (the BMA). The company’s four major lines of business include the following:
Casualty Reinsurance: Coverage provided to ceding company clients on third-party liability and workers’ compensation exposures, primarily on a treaty basis. Business written includes coverages, such as executive assurance, medical malpractice liability, other professional liability, workers’ compensation, excess and umbrella liability and excess auto liability.
Other Specialty Reinsurance: Coverage provided to ceding company clients for personal and commercial auto (other than excess auto liability), mortgage, surety, accident and health, workers’ compensation catastrophe, agriculture and marine and aviation.
Property Catastrophe Reinsurance: Protects ceding company clients for most catastrophic losses that are covered in the underlying policies. Perils covered might include hurricane, earthquake, flood, tornado, hail and fire, and coverage for other perils on a case-by-case basis. Property catastrophe reinsurance provides coverage on an excess of loss basis when aggregate losses and loss adjustment expense from a single occurrence of a covered peril exceed the retention specified in the contract.
Insurance Programs and Coinsurance: Targeting program managers and/or coinsurers with expertise and niche products offering primary and excess general liability, umbrella liability, professional liability, workers’ compensation, personal and commercial automobile, inland marine and property business with minimal catastrophe exposure.
The company’s insurance operations are conducted in the United States and Europe. Its insurance strategy focuses on pursuing underwriting opportunities in the U.S. and European insurance markets and it views its insurance platform as having the potential to provide meaningful premium growth.
In the United States, the company is authorized to write commercial P&C lines of business in both the admitted market and the excess & surplus (E&S) market through its Watford Insurance Company (WIC) and Watford Specialty Insurance Company (WSIC) subsidiaries, respectively, with distribution through coinsurance relationships or through select program managers that develop and distribute specialized insurance products for these subsidiaries. In the U.K., the company writes direct insurance and coinsurance business, primarily in personal P&C lines, through lead insurers and program managers that develop and distribute specialized insurance products for its Watford Insurance Company Europe Limited (WICE) subsidiary. The acquisition of Axeria would extend its insurance platform across the European Union.
Reinsurance operations
Watford Re is a licensed, Class 4 Bermuda-based reinsurer operating under the supervision of the BMA. Arch serves as the company’s reinsurance portfolio manager and provides reinsurance-related services, including exposure modeling, loss reserve recommendations, claims handling and other related services as part of the company’s long-term services agreements with them.
Insurance
In the United States, the company’s principal insurance subsidiaries are WSIC and its wholly-owned subsidiary, WIC, both of which are domiciled in New Jersey. WSIC is an eligible E&S lines insurer in all 50 states and the District of Columbia. WIC is an admitted insurer in all 50 states and the District of Columbia. Following the company’s acquisition of WIC in 2016, it has expanded its certificates of authority to cover a range of lines of business in 49 states and the District of Columbia, and it is in the process of similarly expanding its authority in one remaining state. Both WSIC and WIC are located in New Jersey. Through WSIC and WIC, the company has the flexibility to access both the E&S and admitted sectors of the U.S. P&C market. Its U.S. insurance subsidiaries focus primarily on commercial casualty lines of insurance and have initiated writing business through select program managers.
The company’s insurance operations in Europe are conducted through WICE, which has its principal office in the British Overseas Territory of Gibraltar. Following Brexit, WICE focuses on the U.K. risks, primarily in personal lines of insurance but would also entertain commercial casualty lines. The acquisition of Axeria would provide access to insurance risks across the European Union.
Strategy
The key elements of the company's strategy include to execute a dynamic business model; build an insurance platform that supplements its reinsurance business; capitalize on the expertise and infrastructure of Arch, its exclusive underwriting manager; pursue an investment approach that complements its underwriting strategy; and maintain a robust risk management program. Its strategy also includes a conservative approach to underwriting risk. The company’s strategy combines a diversified, casualty-focused underwriting portfolio, accessed through its multi-year, renewable strategic underwriting management relationship with Arch, with a disciplined investment strategy consisted primarily of non-investment grade corporate credit assets, managed by HPS Investment Partners, LLC. The company’s strategy is to operate in lines of business in which underwriting expertise could make a meaningful difference in operating results.
Regulation
The Insurance Act 1978, and related rules and regulations (Insurance Act), pursuant to which the BMA regulates Watford Re, provides that no person shall carry on insurance or reinsurance business in or from within Bermuda, unless registered under the Insurance Act by the BMA.
Competition
In its underwriting business, the company competes with insurers that provide specialty P&C lines of insurance and reinsurance, including, among others: Aspen Insurance Holdings Limited, AXIS Capital Holdings Limited, Berkshire Hathaway, Inc., Chubb Limited, Everest Re Group Ltd., Fairfax Financial Holdings Limited, Greenlight Capital Re, Ltd., Hannover Rückversicherung AG, Lloyd’s, Markel Corporation, Munich Re Group, PartnerRe Ltd., RenaissanceRe Holdings Ltd., Third Point Reinsurance Ltd., Transatlantic Reinsurance Company and AXA XL Ltd.
History
Somers Group Holdings Ltd. was founded in 2013. The company was incorporated in 2013.
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