Flagstone Marks Fifth Anniversary

Flagstone Reinsurance Holdings, S.A. celebrates its fifth anniversary this week, one of the so-called post-Katrina Bermuda start-up firms which has evolved into a major industry power player.

Flagstone, set up in the wake of the market dislocation caused by Hurricane’s Katrina, Rita, and Wilma in 2005, began in Bermuda in December, 2005 with $550 million in capital and has since grown to over $1.45 billion in underwriting capital and wrote $988.5 million of premiums in 2009.

“We have worked hard since 2005 building a platform to produce quality underwriting opportunities from around the globe,” said David Brown (pictured), co-founder and chief executive officer of Flagstone Re. “We now have offices in 12 countries and more than 450 employees. We have come a long way in five years and are very pleased with the business we have built.

“Our success is based on the talent and hard work of our staff, the service we offer clients, and the underwriting discipline we continue to maintain. Our agility in being able to adapt to changing market conditions and the strong financial performance we have shown in the past five years are testament to the fact that we have established ourselves as a premier global short-tail reinsurer.”

Building on this early success, Flagstone has continued to develop a professional team of experts known for their depth of knowledge and comprehensive risk modeling and analysis, in addition to award-winning client service.

Flagstone has been the recipient of several awards since inception including being voted Reinsurance Company of the Year by the Review’s Worldwide Reinsurance Awards for 2010.

Last week Flagstone announced its Bermuda-based co-founder Mark Byrne had retired from the company’s board of directors six months after stepping down as its executive chairman.

Flagstone said it was  buying more than eight million shares of Flagstone — approximately  10.4 percent of the company’s outstanding shares — owned by companies associated with Mr. Byrne (pictured at left) for about $11.50 per share.

Mr. Byrne served as a non-executive member of the board of directors at the time of his retrement. Daniel James, a founding partner and head of North American operations for private equity firm Trilantic Capital Partners, succeeded Mr. Byrne as chairman.

Flagstone (Bermuda) Holdings also agreed to buy a warrant issued to a company associated with Mr. Byrne at the founding of Flagstone Reinsurance Holdings for $13.5 million.

Mr. Byrne was the founder and chief executive of Bermuda hedge fund manager West End Capital Management before starting Flagstone. He is the son of John J. Byrne, former chair of Bermuda re/insurance firms Montpelier Re Holdings and White Mountains.

Earlier this year Flagstone Reinsurance Holdings announced it was changing its place of incorporation from Bermuda to Luxembourg.

Flagstone has operated in Luxembourg for most of its corporate history and is familiar with that European domicile’s regulatory and legal environment.

But the company’s principal operating center remains in Switzerland and Flagstone maintains underwriting and executive offices in Bermuda. The reincorporation would have no material impact on the company’s operations, said Mr. Brown at the time, and Flagstone would retain its substantial offices and operations in Bermuda where it has conducted business since it was founded.

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