September 2016 – Watford Specialty Insurance Co. (WSIC), a NJ-domiciled subsidiary of Bermuda-based Watford Re, has advanced its strategy of building its U.S. program business through WSIC’s recent purchase of a previously-dormant carrier that is admitted in all 50 states and the District of Columbia.
The admitted company has been renamed “Watford Insurance Co.” (WIC), and, like WSIC, WIC will source business through its exclusive origination, underwriting and administration relationship with Arch Underwriters Inc. (AUI), a wholly-owned subsidiary of Arch Reinsurance Company, based in Morristown, NJ.
Together, WSIC (as an E&S writer approved to write in 49 states and DC) and WIC will allow Watford to expand its program writings, with Watford able to provide admitted or E&S capacity based on the needs of the particular program manager. In addition to its reinsurance business, Watford Re has assembled this U.S.-based platform in order to build a portfolio of insurance business. Watford has a group rating of “A-minus (Excellent) by A.M. Best with Financial Size Category XII ($1 to $1.25 billion), and WSIC and WIC bring the market sizeable new capacity unburdened by any legacy portfolio issues.
John Willemsen of Arch Reinsurance Company is excited by the prospect of connecting WSIC and WIC with select, well-regarded program managers: “Program managers want the ability to place their business with highly-rated carriers that enable accessing both admitted and E&S markets, thus maximizing the program manager’s toolkit to meet clients’ needs,” he said. “In its first several months of operations, WSIC already has three program managers signed-up, and now, with the addition of WIC’s admitted capacity, we look forward to augmenting that group.” He continued, “We plan to partner with program managers who have recognized expertise in their business lines combined with a solid industry reputation in underwriting as well as quality of service.”
He explained that WSIC and WIC will target building a diversified portfolio of profitable program business, with most lines being available other than Cat-exposed property.
WIC and WSIC each offer capacity up to $25 million with the possibility of larger lines if required in specific circumstances.
From Watford’s standpoint, the unique relationship with AUI enables Watford Holdings (US) to leverage AUI’s market knowledge and extensive contacts among a number of the country’s premier program managers, and Watford plans to uphold Arch’s tradition of responsiveness and consistency. Partnering with AUI allows Watford to scale its primary writings while maintaining the efficiencies inherent in operating with a lean senior management team.
Prior to its purchase by WSIC, WIC was known as Professionals Direct Insurance Co. and had been dormant for three years. The Hanover Insurance Co. sold the company to WSIC and has assumed all pre-acquisition business liabilities through quota share and other agreements. Hanover Insurance Company is rated “A” (Excellent) by A.M. Best with Financial Size Category XV ($2 billion or greater). The Hanover will not have any liability for, nor interest in, new business written by WIC.
