A vision of becoming the “pre-eminent force in the local Bermuda insurance market” has led one of the Island's largest global insurers to join forces with a local domestic insurer.

The players - ACE subsidiary ACE Bermuda Insurance Ltd. (ACE Bermuda) and Freisenbruch-Meyer - have created a new local insurance company, Freisenbruch-Meyer Insurance Limited (FMIL), to write insurance coverage in the domestic market.

The principals in the deal said they believed this to be the first time that the two Bermuda insurance sectors - international and domestic - have partnered to serve the local market.

But it is not the classic case of putting one's money where one's mouth is, with ACE Bermuda putting up money up for the venture but taking no management say in the new operation.

Atlhough ACE Bermuda won't be running or underwriting the business, it will act as the principal reinsurer for FMIL.

ACE Bermuda CEO and president Mark Herman said: “ACE Bermuda is committed to Bermuda for the long-term so it was a natural progression for us to partner with long-established local company Freisenbruch-Meyer Group. The company has well respected management and underwriting teams and we are delighted that we can assist them in meeting their vision of becoming a preeminent force in the local Bermuda insurance market.”

Mr. Herman added that ACE was “delighted” to invest in Freisenbruch-Meyer and that it showed “utmost respect” for the company as well as faith and confidence in the local population as consumers.

ACE Bermuda is taking the maximum stake allowed by law with a 40 percent equity holding in FMIL.

Regulations commonly referred to as the 60/40 rule restrict ownership by a non-Bermudian party or exempt company to 40 percent, unless exemption is granted as has recently been the case with some of the Island's financial institutions.

In addition, ACE Bermuda has invested 40 percent in the company's managing agency Freisenbruch-Meyer Insurance Services Ltd. (FMISL). which will provide the underwriting, claims and administration services for FMIL.

Freisenbruch-Meyer Group president Michael Freisenbruch said the company's operation - including the new company - will remain at 75 Front Street with retention of all existing staff. He added that looking ahead the company foresaw taking on new staff as business expansion was realised. The company currently has about 25 employees.

Mr. Freisenbruch added: “ACE Bermuda's investment in FMISL will allow us to grow our current lines of business in Bermuda as well as expanding the company to develop new products to meet the needs of our customers.”

Mr. Freisenbruch said the company intended to offer a full-range of insurance products for businesses and personal policies including home, auto and marine. He added that FMISL would continue to offer - as it has to date - life, health and pension products.

Mr. Freisenbruch said it would be “premature” to say what new products the companies might offer. But he did say the investment should enable the company to continue its evolution - he cited the company as having grown from meagre beginnings in the early 1980s - and that this was an example of the firm “taking it to the next level”.

“Having an investor of ACE's stature and quality, combined with reinsurance of the business, is a real achievement which we will embrace wholeheartedly and use as a platform for further development,” Mr. Freisenbruch said.

Competitors in the domestic market yesterday said they welcomed the news of the ACE and Freisenbruch-Meyer deal especially as it may increase capacity for larger risks.

President and CEO of BF&M Ltd. Glenn Titterton said: “Competition is always a good thing and in the public interest.”

He added: “Another strong insurer (in the domestic market) will help with capacity for some of the larger risks,” he said.

President and CEO of the Argus Group Gerald Simons said: “It looks like we will have another player in the local insurance market. And we welcome the new player.”

Mr. Simons added: “We have had a long relationship with Freisenbruch-Meyer and it is not uncommon in the local market for insurance companies to share risks; to reinsure with each other effectively. And possibly this will add capacity to the local market so that it will be easier to place some of the larger risks.

“We have also had a long-standing relationship with ACE. You may recall that we sold them the land on which their building is built,” Mr. Simons said.

Freisenbruch-Meyer Group was founded in 1980 by Mr. Freisenbruch and Meyer Agencies Limited and is comprised of a Bermudian group of companies formed to provide comprehensive insurance management, broking and agency services. The ACE Group provides insurance and reinsurance around the globe.