In conjunction with Marsh & McLennan, the world's largest insurance broker, and J P Morgan, the investment bank, Merrett has set up a company in Bermuda to be called Underwriters Capital (Merrett).
This will allow extra reinsurance capacity to allow syndicates at Lloyd's to buy insurance protection for liabilities which cannot be quantified at the time.
The company, in which both Marsh & McLennan and J P Morgan are subscribing up to dollars 7m, will offer the service to nine insurance syndicates under the Merrett management. Dennis Purkiss, Merrett's chief executive, said: 'This initiative adds a further significant element of stability for the syndicates. The new company will share the overall costs of underwriting, thereby reducing the expenses of individual names (the underwriting members). Furthermore, names will benefit from profit commission earned from the company.'
He added: 'The negotiations have taken several months to conclude and we are very pleased these prestigious investors have confidence in our agency to support our syndicates.'
Other agencies such as Sturge Holdings are seeking to bring companies further into the market as direct members of Lloyd's in an effort to underpin the market's capital, which has always been provided by individuals with unlimited liability.Reuse content