Conyers advises on the licensing of Watford Re as a Class 4 insurer

Conyers Dill & Pearman has advised on the licensing by the Bermuda Monetary Authority of Watford Re, a multi-line Bermuda reinsurance company that launched with $1.13bn (£674m) of capital, as a Class 4 insurer.

Arch Underwriters, a subsidiary of Arch Capital Group Ltd (AGCL), will act as Watford’s reinsurance manager, and Highbridge Principal Strategies, a subsidiary of JPMorgan Chase & Co, will manage Watford’s investment assets, each under a long-term services agreement.

Watford has received an ‘A-’ (Excellent) financial strength rating from AM Best. Watford’s strategy is to combine a diversified reinsurance business with a disciplined investment strategy comprised primarily of non-investment-grade credit fixed-income assets.

Watford was capitalised by way of a private offering by Watford’s parent, Watford Holdings, which issued $907m common shares, including a $100m investment by a subsidiary of AGCL and $226m preference shares.

Graham Collis, Chris Garrod and Mary Ward of Conyers’ Bermuda office advised on the matter, working alongside Clifford Chance and Cahill Gordon & Reindel.