Company Launch of the Year - Max Re named "Company Launch of the Year"

  September 11, 2000

THE REVIEW WORLDWIDE REINSURANCE AWARDS 2000

Bermuda witnessed the launch of Maximus Capital Holdings, and its operating subsidiary, Max Re in 1999; the new company raised $511m of private equity capital and earned an A-rating from AM Best. It focuses on providing customised alternative risk transfer solutions to life and health and property/casualty insurance and reinsurance clients worldwide.

The judges felt the new enterprise “is providing capacity in areas of business where it is much needed”.

Max Re attracted an impressive array of strategic equity investors at a time when insurance stocks generally were trading at historic lows. They included Western General Insurance, subsidiaries of Citigroup, High Ridge Capital Partners II, LP, Aon Corporation, Bank of America Securities LLC and Stockton Reinsurance Global Investments.

The company’s founding investors were Moore Holdings, LLC, managers of a large acro hedge fund, with a ten-year record of producing above average returns with low levels of volatility, and Capital Z Partners, LLC, an investment fund backed by Zurich Insurance and headed by insurance mogul, Steven Gluckstern. Together with Max Re’s chairman,
president and CEO, Bob Cooney – former president and CEO of Bermuda’s XL Insurance – they have sought to bring a fresh perspective to the convergence of the insurance and capital markets.

Max Re’s entry said it will differentiate itself by “implementing a more sophisticated investment strategy than is typical for insurance companies, including a significant allocation to alternative asset classes designed to produce superior risk adjusted returns”. The CEO has assembled a 12 strong professional management team, which includes former senior executives and life and casualty actuaries from General Re, Swiss Re, ING Re, Aegon, Ace, Centre Solutions, Renaissance Re, Stockton Re, Scandinavian Re, Lehman Re and Sedgwick. A European office has been opened in Dublin.

The underwriting, actuarial and investment team achieved 42 submissions and bound $80m in premium during its first three months of operation. Cooney has led Max Re in two capital acquisition efforts that garnered in excess of $500m in equity in approximately eight months.

In launching Max Re, its founders recognised the opportunity presented by shifts in customer needs and a trend towards convergence of insurance and capital market products, consolidation and growing price sensitivity. AM Best’s A- rating in January 2000 reflected its expectation that Max Re’s executive management, experienced in the reinsurance arena and similar start-ups, will enable the company to succeed in executing its business plan. It said: “Max Re’s financial flexibility, and the existence
of a $250m letter of credit facility, provided by Bank of America, provides adequate support for policyholder liabilities given the nature of the organisation’s risks, and planned investment strategies.”