Bermuda-based Arch Capital Group Ltd. yesterday announced it had received approval in principle from regulators to set up a new managing agent and syndicate at Lloyd's and had also set up a new European reinsurance unit.

Arch said it expects its new Lloyd's syndicate to start underwriting in the first half of this year, having received approval in principle from the Lloyd's Franchise Board and UK financial regulator the Financial Services Authority.

"The syndicate will enhance the company's underwriting platform by providing the Company with access to Lloyd's extensive distribution network and worldwide licences," Arch said in its statement yesterday. The management of the new managing agent will be provided by Arch's existing senior team located in London, and the syndicate will be supported by a corporate member that is wholly owned by the company.

Arch also said it had recently established Arch Reinsurance Europe Underwriting Ltd. based in Dublin, Ireland, and its branch office located in Zurich, Switzerland.

"Arch Re Europe will complement the existing property and casualty treaty capabilities within the company's reinsurance group, while providing greater accessibility to brokers in Europe," Arch said.

"Under the recent European Union Reinsurance Directive, Arch Re Europe will be able to operate in all EU member states under a single regulatory framework." Arch Re Europe has been rated A (strong) by Standard & Poor's.