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XL Pulls Out Of Sovereign Joint Venture
Bermudian insurer Ace will become the sole owner of political risk specialist Sovereign Risk Insurance by Feb. 1 this year.
Bermudian insurer Ace will become the sole owner of political risk specialist Sovereign Risk Insurance by Feb. 1 this year. The firm's joint venture partner in Sovereign, fellow Bermudian insurer XL Insurance, has decided to sell its 50% stake in the business after announcing impending changes to its underwriting strategy for emerging market risks.
Terms of the deal were not disclosed and both parties declined to comment on the restructure of Sovereign. But it is understood that, after sustaining net losses of $1.68 billion in the 2005 hurricane season and recording a net reserve charge of about $830 million at its Swiss subsidiary Winterthur International, XL is under pressure from rating agencies to exit some catastrophe business, including political risks.
Evan Greenberg, president and chief executive of Ace, said in a statement that his firm is "delighted to have the opportunity to assume 100% ownership of Sovereign".