Watford Re, the investment-oriented, total return reinsurance joint venture run by Bermudian re/insurance group Arch Capital alongside asset manager Highbridge Principal Strategies, is planning to expand its operations in Europe with a move into the Romanian insurance market, according to a report.
Watford Re started out as a total-return vehicle that took most of its risk from Arch Capital companies, but with its insurance platform expanding under the Watford Insurance brand, the company is now sourcing new risk as well, which can all be reinsured back to Watford Re helping it to build its float which is invested by Highbridge and ultimately adding income for Arch as well.
According to Xprimm media, Watford Re is set to launch a retail insurance operation in Romania, largely focused on motor third-party liability risks to begin with, but perhaps expanding to cover other retail products including property risks in the future.
Watford Insurance Company Europe Limited is looking to set up a branch office in Romania to conduct the underwriting business and applications have been made to the regulators in Gibraltar, where Watford Re’s insurer is domiciled, and Romania to establish this new office.
According to the report, Watford Re’s decision to move into Romania came after it evaluated the opportunity in the local motor insurance market. The company is said to be working with INTARO Insurance Services S.A. to set up the operations.
So Watford Re, as well as providing Arch with total-return style income and fees through a reinsurance vehicle that is third-party capitalised, is now also providing additional diversification and expansion options to the company as well, all the while growing the all-important pool of investable float.
The additional underwriting activity provided by new operations around the globe will contribute to this, as well as ensuring the float remains diversified which can help when matching it to the total-return investment strategy.
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