For the first time since the 1980s, corporate America will be able to purchase insurance to protect against legacy asbestos risk which, according to the US Chamber of Commerce, has cost companies an estimated $70 billion and forced more than 70 companies into bankruptcy. Based in Bermuda, St. George Re Limited (St. George Re) announced today that it has commenced operations to write insurance designed specifically to remove uncertainty and provide resolution to historical corporate asbestos risk
St. George Re was founded in response to the demand from companies faced with potential liability arising from asbestos-related personal injury claims. The Company offers insurance coverage which protects against risk of loss from future asbestos claims and provides coverage for the costs of defending against those claims.
Prior to St. George Re, the only options available to manage asbestos risks projected to extend to 2050 or beyond were self insurance, engaging in ‘finite’ or non insurance contracts, or filing for bankruptcy.
“Managing and absorbing the risk of legacy asbestos problems in-house can consume significant corporate and managerial resources. This ‘asbestos overhang’ also clouds perceptions of shareholder value as outside parties and stakeholders struggle to understand how a company’s asbestos problems will impact its balance sheet and future earnings,” explained CEO Colin R. Barnes. “Our goal is to provide resolution to a company’s asbestos problems so that companies can focus on their core competencies and shareholders can realize the benefits that removing the ‘asbestos discount’ from the Company’s stock valuation can provide not just over the long run but immediately at the point of risk transfer”.
As a dedicated asbestos insurer, St. George Re offers manuscripted coverage options to a broad range of customers seeking security against adverse asbestos liability development. St. George Re provides two distinct offerings:
1. Excess Liability coverage to corporations providing for indemnification of loss, defense, and loss expenses related to asbestos-related liability; and
2. Ground-Up Coverage and claims management providing first dollar loss indemnification, defense costs, and loss expenses to corporations facing asbestos-related liability
St. George Re is the only insurer to focus solely on providing asbestos coverage. Company executives have more than 75 years combined experience in dealing with asbestos risk, having structured over $3 billion in asbestos related risk transfer solutions for both insurance carriers and policyholders.
Beyond human capital assets, St. George Re maintains a proprietary database containing millions of unique claim records which allows it to monitor trends across companies, industries, regions, and exposure periods.
The Company’s underwriting expertise is backed by a capital base unencumbered by legacy business risks. Additionally, St. George Re has a strategic capacity arrangement with the Berkshire Hathaway Group of Companies (NYSE: BRK-A) which allows the Company to underwrite and deliver policy limits anticipated to meet the largest of coverage levels desired by corporate asbestos defendants. Uniquely, St George Re will also cater to small to mid-sized corporations in need of a responsive insurance provider who can offer resolution to their asbestos legacy issues.
“We are excited about the potential value of St. George Re’s new asbestos liability insurance product to Aon’s many clients with existing or potential U.S. asbestos liabilities. This is another positive example of innovative product development from the Bermuda insurance market,” stated Joe Rego, President and COO of Aon (Bermuda) Ltd. (NYSE: AOC). “Aon looks forward to working together with St. George Re and our clients to identify situations where this asbestos risk transfer vehicle makes good sense as a complement or supplement to existing risk management strategies and insurance programs.”
St. George Re is managed by CEO Colin Barnes, a pioneer in the risk management field, who has more than 30 years of achievement in insurance company operations, corporate risk management, captive insurer operations, and board member service with various commercial and mutual insurance companies in Bermuda, London, and the U.S. St. George Re’s President, Jason Paterniti, has worked in the insurance and capital markets since 1993, and brings a broad base of financial and risk management expertise to St. George Re and its clients. The company’s Chief Actuary, Kate O’Reilly, has extensive experience in asbestos reserving, underwriting, and pricing, having been a member of Tillinghast’s London Asbestos Pollution Hazard team.
About St. George Re:
St. George Re was formed to respond to demand from companies faced with asbestos-related personal injury liability for true insurance risk transfer products. Its team of legal, insurance, actuarial and allocation professionals specialize in all facets of asbestos liability management including claim analysis, loss projection, allocation modeling, and risk management valuation and pricing. St. George Re’s founding investors are funds managed by Context Capital Management LLC, Plainfield Asset Management LLC, and Silver Creek Capital Management LLC. St. George Re is an open Bermuda market and will transact business from its Hamilton, Bermuda office via licensed Bermuda brokers.