Decision is 'part of global restructuring'
Flagstone Re has launched a plan to restructure its global reinsurance operations by merging its two wholly owned subsidiaries, Flagstone Reinsurance Limited of Bermuda and Flagstone Réassurance Suisse SA into one operating platform which will be Flagstone Réassurance Suisse SA with its existing Bermuda branch. This change will provide clients and the market as a whole a solid, single capital base to support Flagstone’s reinsurance business, while still offering a choice of either Bermuda or Swiss underwriting access so as to participate fully in both the important Bermuda market and the global markets served in Switzerland. Total underwriting capital is estimated to be $1.6 billion pro forma as of September 30, 2008.
The change in corporate structure will not result in any change of management or corporate control, nor will there be any changes to the Board of Directors. The Flagstone reinsurance platform remains under the ownership and control of Flagstone Reinsurance Holdings Limited, a NYSE-listed and SEC regulated company. Flagstone Reinsurance Holdings is a Bermuda company and will remain in Bermuda.
Mark Byrne, Flagstone’s Chairman, noted: “This restructuring consolidates our capital in one main operating entity, maximizing our capital efficiency and creditworthiness. Furthermore, Swiss companies, like Bermuda companies, are expected to obtain `passport' rights throughout Europe for reinsurance. We remain committed to Bermuda as an operating platform and a key marketplace. We have approximately 50 employees in Bermuda and expect that figure to grow over the years.”
David Brown, Flagstone’s CEO, added: “This platform allows us to provide all our clients access to a single and larger balance sheet than previously available thereby providing a superior and more transparent credit. We will continue to serve our clients in the Bermuda and Swiss marketplace in exactly the same manner as we do today. We believe that this move benefits the needs of our clients and we remain committed to our financial strength and client service.”
The restructuring is subject to various regulatory approvals and rating agency affirmation of ratings.