Talbot Underwriting Completes Capital Raising

Talbot Underwriting, the Lloyd’s managing agency, completes US$120 million capital raising.

Talbot Underwriting Syndicate 1183 plans premium income of £180 million for 2002 Talbot Underwriting Ltd (“Talbot Underwriting”) announces that it has raised $120 million (£85 million) in capital support for its underwriting at Lloyd’s in 2002. This enables the agency’s Syndicate 1183 to write premium income of £180 million for the 2002 year of account, after taking account of quota share support. Talbot Underwriting has been advised by Dresdner Kleinwort Wasserstein. These figures significantly exceed the targets set when Talbot Underwriting was jointly established in November 2001 by the former Alleghany Underwriting management team, led by Chief Executive Michael Carpenter and Director of Underwriting Rupert Atkin, and US-based investors from Black Diamond Group LLC, led by Heidi Hutter and Jay Novik.

Talbot Underwriting’s investors include Intermediate Capital Group PLC and Reservoir Capital Group, LLC. Investment capital has also been provided by a number of leading reinsurance groups, senior Talbot employees and principals of Black Diamond Group.

Syndicate 1183, led by Rupert Atkin, underwrites a diverse range of business that is predominantly short-tail in nature with a major focus on the marine classes in which it is an established market leader. The Syndicate also focuses on direct property, financial institutions and treaty business. From 1995 to 1999 Rupert Atkin was underwriter of a leading marine syndicate at Lloyd’s, also numbered 1183, which produced a profit in all its closed years and since 1996 has been in the top quartile of Lloyd’s results.

Michael Carpenter, Chief Executive, commented: “We are delighted to have raised capital of $120 million – it exceeds the expectations we had when we formed Talbot Holdings at the end of last year and is a real boost to our business. It is especially pleasing to be one of the first Lloyd’s companies to have attracted new investors into the Lloyd’s market in 2002.”

This release is issued as a matter of record only.

Ends For further information, please contact:

Marc Moninski/Catherine Spaul, Fishburn Hedges Tel: 020 7839 4321

Notes to editors:

Talbot’s Syndicate 1183, led by Rupert Atkin, is a new syndicate established for the 2002 year of account, which underwrites all the main marine classes, including war, political risks, hull, energy, cargo, and marine liability, as well as direct property and financial institutions. The Syndicate also underwrites a treaty account, which specialises in aviation treaty. The Syndicate’s business is predominantly short-tail and avoids US casualty exposures. Prior to 2002, the Syndicate’s business formed part of the underwriting activities of composite Syndicate 376. Talbot Holdings owns a service company, Underwriting Risk Services Ltd, which operates mainly as a yachts and marinas service company,
with capital support provided by Syndicate 1183 and a range of other Lloyd’s syndicates and company market insurers.

Investor details:

Intermediate Capital Group PLC is a UK company listed on the London Stock Exchange. It is the European market leader in the provision of mezzanine finance. It invests principally from its own capital resources, but also from over Euro 1.5 billion of funds under management. Based in New York City, Reservoir Capital Group, LLC manages private investment partnerships with over $500 million in invested capital.

Black Diamond Group, LLC (BDG) is a merchant bank and advisory company specialising in the insurance industry. The New York-based group focuses on insurance company restructurings in both the property/casualty and life sectors.
Its principals are Jay Novik, Heidi Hutter, Eric Lemieux, Bruce Reich and Dan Gross.

Reinsurance investment capital is provided by leading international reinsurance groups with ratings of AA to AAA.

Individual Biographies:

Michael Carpenter

Michael Carpenter is the chief executive of Talbot Underwriting. He joined Alleghany Underwriting in June 2001 and oversaw the buyout from Alleghany Corporation which led to the creation of Talbot Underwriting in November 2001. He is a Chartered Accountant and, after qualifying, worked for Samuel Montagu (now part of HSBC), principally within its corporate finance division. In 1993, Michael help to set up and subsequently became Managing Director of Limit plc, the largest quoted corporate underwriting vehicle established in the Lloyd’s market. Between 1996 and 1998 he was jointly responsible with the Chairman for negotiating the acquisitions of two leading Lloyd’s managing agencies, following which Limit’s underwriting capacity was increased to approximately £680 million, and the group employed some 750 employees.
Michael has been a committee member of the Lloyd’s Market Association and the Lloyd’s Underwriting Agents’ Association. He has also been chairman of the Lloyd’s Corporation Budget Review Group.

Rupert Atkin

Rupert Atkin has spent his whole working life at Lloyd’s, firstly as a broker and moving to underwriting in 1982. He formed Syndicate 1183 in 1990 as a subsyndicate of syndicate 376, when it was managed by the Venton agency. All years of account to 1998, including the first start-up year, have closed with a profit and outperformed the market average. Rupert has served on a number of market committees including the loyd’s
Underwriters’ Association and the Lloyd’s Market Association. He has been Chairman of the Lloyd’s Underwriters’ Association and a member of the Insurance Services Board. He is currently a member of the Lloyd’s Regulatory Board.

Jay Novik

Jay Novik, Chairman of Black Diamond Group, LLC, is one of the inventors of both life and property/casualty financial reinsurance. During a 22-year career at Swiss Re, he established several entities focusing on finite risk reinsurance
including Atrium Corp., a reinsurance intermediary, and European International Reinsurance Company, a Barbados underwriting company. He was CEO of Atrium, European International and Swiss Re Financial Services. Jay was also
Vice Chairman of Swiss Re New Markets, Swiss Re America and other Swiss Re companies. He has been an active investor in several insurance ventures. He is a Fellow of the Society of Actuaries and a member of the American Academy of Actuaries.

Heidi Hutter

Heidi Hutter, CEO of Black Diamond Group, LLC, has twenty years’ experience in property/casualty insurance. She began her career in 1979 with Swiss Reinsurance Company in New York, where she specialized in the then new field of finite reinsurance. From 1993 to 1995, she was Project Director for the Equitas project at Lloyd’s of London, which became the largest run-off reinsurer in the world. From 1996 to 1999, she served as CEO for Swiss Re’s US and Canadian operations and as a member of the Executive Board of Swiss Re in
Zurich. She is a Fellow of the Casualty Actuarial Society and a member of the American Academy of Actuaries.

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