ACE Limited (ACE - Analyst Report) has launched a $95 million special purpose vehicle— Altair Re, to strengthen it global reinsurance business. The launch of Altair Re will help the company meet the coverage requirements of its insurance and reinsurance clients in a more efficient manner.
The capital held within Altair Re will be deployed to strengthen ACE Tempest Re’s global property catastrophe reinsurance business. Headquartered in Bermuda, ACE Tempest Re Group manages the reinsurance operations of ACE Group and has operations in Bermuda, London, Montreal, Stamford, Sao Paulo, Zurich and Shanghai.
ACE Tempest Re has maintained profitability and conservative underwriting for some time now. Thus, capital market investors will invest more and benefit from ACE Tempest’s consistent performance. In turn, the additional capital will help the company to fortify its operations in the property catastrophe market and take advantage from the same.
Net premiums written by the global reinsurance segment of ACE increased 4.7% year over year to $1.0 billion in 2012 and contributed 6% of the net premiums earned in 2012. The launch of Altair Re is expected to enhance the overall revenues of the company further. The Zacks Consensus Estimate for the first quarter of 2013 is currently pegged at $3.8 billion.
Product launches have diversified the company’s portfolio and served clients better. This in turn has helped the company deliver better numbers and we expect it to continue going forward. Towards this end the U.S. based retail operations of ACE known as ACE USA, introduced a Foreign Casualty Pollution Liability coverage endorsement last month. This coverage option will provide insurance and risk management solutions to the globally operating mid-sized and large-scale multinational companies located in the U.S.A.
Among others in the industry, Everest Re Group Limited (RE - Analyst Report) established a new special purpose reinsurer in Bermuda – Mt. Logan Re Ltd. in Jan 2013 to offer collateralized capacity to the global property catastrophe reinsurance market.
ACE currently carries a Zacks Rank #2 (Buy). Everest Re and other insurers like Cincinnati Financial Corp (CINF - Analyst Report) and Axis Capital holdings Limited (AXS - Analyst Report) carry a favorable Zacks Rank #1 (strong Buy) and are worth noting.