Zurich invests in Bermuda start-up

Zurich Financial Service's headquarters in Zurich Keystone

Zurich Financial Services is investing $200 million (SFr327.4 million) in Endurance Specialty Insurance in a joint venture with the United States-based Aon Corp.

Zurich said on Thursday that the operation would help give Endurance, a new Bermuda-based insurance and reinsurance company being set up by Aon, the world’s number two insurance broker, underwriting capacity in commercial property and casualty insurance.

Aon, which is also putting $200 million into the venture, has said it was setting up the underwriter to take advantage of soaring premiums after the September 11 destruction of the World Trade Center in attacks with hijacked aircraft.

Investments from other financial services firms would bring total capitalisation of the new venture to $1.2 billion.

Bermuda bandwagon

Aon is the latest in a line of insurers to set up or invest in start-ups in Bermuda, all hoping to net higher premiums in time for the January 1 renewal of most reinsurance policies.

Analysts have said the largest insurers and reinsurers had the size and balance sheet strength to benefit the most from the post-WTC premium increases that reflect both higher actual risks and increased demand.

While medium and small sized outfits were seen not to have the financial strength to take part in the expected upswing, start-ups could benefit from the gaps those companies would leave in the market, analysts said.

Zurich, which is Europe’s third-largest insurer, owns several investment, insurance, reinsurance and financing businesses in tax-free Bermuda, and island which is home to some to the world’s leading reinsurance companies.

swissinfo with agencies