Endurance Specialty Holdings Ltd. on Friday bought US insurer The Hartford's in-force property casualty reinsurance business.

Endurance paid The Hartford $25 million at the closing. Under the terms of the deal, Endurance did not buy HartRe outright, but acquired the right to renew the existing policies, which carry about $400 million of premiums.

How much the Hartford gets for selling the rights depends on how much Endurance is able to retain and what level of profit it makes.

The deal gives Endurance renewal rights on a selected group of contracts representing a majority of Hartford subsidiary HartRe's current in-force premiums and quota share reinsurance of the unearned premium reserves associated with such contracts as of April 1, 2003.

Endurance will not assume past loss reserve liabilities from HartRe as part of this transaction.

Endurance said it had been reinsuring this business through its US subsidiary, Endurance Reinsurance Corporation of America. A significant number of claims, underwriting, and actuarial professionals of HartRe have been offered employment at Endurance, although the Hartford Courant reported on Saturday that some of HartRe's 120 employees will be out of work.

Kenneth J. LeStrange, chairman, president, and CEO of Endurance, said: “We performed extensive due diligence and individual account level reviews of the business that we are assuming. The business had been very heavily re-underwritten in recent years by HartRe's current management team and they had developed a very attractive book of profitable working layer reinsurance that we built our company to pursue.”

The programmes reinsured by Endurance represent approximately $400 million in unearned premium reserve transfer. The bulk of the business acquired is property reinsurance (38 percent), aviation (22 percent) and casualty treaty reinsurance (17 percent).

The Hartford announced a huge boost to asbestos claim reserves and a major capital-raising programme on Monday, sold the reinsurance business because it did not have the scale to compete effectively, the Hartford Courant said.

HartRe was the 17th-largest reinsurer, based on 2002 gross written premiums, according to the Reinsurance Association of America.

The Courant said Endurance had offered jobs to about 40 of the 120 HartRe employees based in Hartford, Connecticut. Employees in the San Francisco, Toronto and London offices were also offered positions.

Mr. LeStrange said he expects a total of about 25 HartRe employees to join Endurance at its White Plains, New York office.

Endurance was founded by Aon and other investors in the wake of the September 11, 2001 terrorist attacks.

It now has 100 employees around the world. The company said the deal should increase return on equity to 13 to 14 percent for the year.