Full Description

Flagstone Reinsurance Holdings Limited (Flagstone), incorporated on October 4, 2005, is a global reinsurance holding company. The Company is organized into two business segments: Reinsurance and Insurance. Through its Reinsurance segment, the Company writes primarily property, property catastrophe, and short-tail specialty and casualty reinsurance. Through the Insurance segment, it primarily writes property insurance for homes, condominiums and office buildings in the Caribbean region. On June 26, 2008, the Company acquired a 65% interest in Flagstone Reinsurance Africa Limited (Flagstone Africa). On November 18, 2008, the Company acquired Marlborough Underwriting Agency Limited (Marlborough). During the year ended December 31, 2008, the Company acquired 100% of Alliance International Reinsurance Public Company Limited (renamed Flagstone Alliance).

In October 2008, Flagstone Reinsurance Holdings Limited announced that it has restructured its global reinsurance operations by merging its two wholly owned subsidiaries, Flagstone Reinsurance Limited of Bermuda and Flagstone Reassurance Suisse SA into one operating platform. The merged entity, Flagstone Reassurance Suisse SA with its existing Bermuda branch, provides clients and the market as a whole a solid, single capital base to support Flagstone’s reinsurance business.

Reinsurance Segment and Products

Property catastrophe reinsurance contracts are all risk in nature, meaning that they protect against losses from earthquakes and hurricanes, as well as other natural and man-made catastrophes, such as tornados, fires, winter storms and floods (where the contract provides for coverage). Losses on these contracts stem from direct property damage and business interruption. The Company writes property catastrophe reinsurance on an excess of loss basis. In the event of a loss, most contracts of this type require Flagstone Reinsurance Holdings Limited to cover a subsequent event and provide for a premium to reinstate the coverage under the contract, which is referred to as a reinstatement premium. These contracts cover only specific regions or geographical areas, but may be on a worldwide basis. It also provides industry loss warranty covers, which are triggered by loss and loss-adjustment expenses incurred by the cedent and some pre-determined absolute level of industry-wide losses resulting from an insured event or by specific parameters of a defined event (such as a magnitude eight earthquake or a category four hurricane).

Flagstone provides reinsurance on a pro-rata share basis and per-risk excess of loss basis. Per-risk reinsurance protects insurance companies on their primary insurance risks on a single-risk basis, such as covering a single large building. Short-tail specialty and casualty reinsurance provide short-tail specialty and casualty reinsurance for risks, such as aviation, energy, personal accident and health, agribusiness, satellite, space, marine, workers’ compensation catastrophe and casualty clash. Most short-tail specialty and casualty reinsurance is written with loss limitation provisions.

Insurance Segment and Products

Island Heritage is a property insurer, which is primarily in the business of insuring homes, condominiums and office buildings in the Caribbean region. The Company gained an interest in Island Heritage, during the year ended December 31, 2007. Marlborough is the managing agency for Lloyd’s Syndicate 1861, a syndicate underwriting a specialist portfolio of short-tail insurance and reinsurance, from the Berkshire Hathaway Group.

The Company competes with ACE Tempest Reinsurance Ltd., AXIS Capital Holdings Ltd., Lloyd's of London, Montpelier Re Holdings Ltd., RenaissanceRe Holdings Ltd., XL Re Ltd, the Sagicor Financial group of companies, Guardian General Insurance Limited, Munich Re Group, Swiss Re Africa Limited, Hannover Reinsurance Africa Limited, Africa Reinsurance Corporation, SCOR S.E. and Everest Re Group Ltd.