Paraline formed from acquisition of US property specialist ICAT

The management of US commercial property insurer ICAT Holdings has formed Paraline Group, a Bermuda-based (re)insurer underwriting international business through Lloyd’s.

In addition to ICAT’s management, the new firm is backed by private investors, including private equity firm Wand Partners and private equity/hedge fund Elliot Management Corporation.

ICAT chairman and CEO Jack Graham has been appointed CEO of Paraline, while Bruce Schnitzer, founder and director of Wand Partners, has been named chairman.

Paraline’s first action has been to buy ICAT from its previous owner, Vulcan, a private investor. ICAT, based un Boulder, Colorado, specialises in offering coverage to commercial properties in hurricane- and earthquake-exposed areas of the US. It underwrites through Syndicate 4242 at Lloyd’s, which was established in 2006 and started underwriting in the 2007 year.

Following the acquisition of ICAT, which was completed in August, the company hopes to expand by both geography and product line through the acquisition of businesses and teams of individuals. Graham said the company will not have a specific focus with regards to territory or product, and will expand where it can find the talent.

While Paraline is launching at a time of softening rates, Graham insisted that the company would only deploy more capital when underwriting conditions are beneficial. For example, he pointed out that Syndicate 4242 is one of the three Lloyd’s syndicates that has announced plans to reduce its capacity at Lloyd’s for the 2011 year.

“We are not going to add fuel to an already-burning market,” he said.