Icat's Lloyd's Syndicate 4242 and Neon have entered into a reciprocal capacity arrangement that will increase capacity to $40mn of per account limit to the Bermuda property direct and facultative (D&F) market.
The additional per risk catastrophe capacity will see Neon offer the limit on properties underwritten from its Bermuda office, with Syndicate 4242 delegating authority to the Martin Reith-headed insurer to write larger property schedules.
Neon - the rebranded Marketform - launched its Bermuda office last summer, which is led by former Ariel Re executive Chris Fisher as head of D&F property.
Neon Bermuda currently writes D&F property insurance on a global basis, with Fisher an approved coverholder for the carrier's own Lloyd's Syndicate 2468, and plans to launch new product lines.
The partnership adds to an existing relationship between the two businesses after Icat signed up Neon last year to provide an additional $10mn of per-risk capacity to its panel of insurers for middle market US commercial properties.
That tie-up helped expand Icat's per-risk cat capacity to $150mn, which it deploys in the US excess and surplus lines (E&S) market through the wholesale channel, and allowed Neon to grow its presence in the space.
The new arrangement will give Icat access to the big ticket property business that finds its way to Bermuda through retail brokers such as Aon, Willis and Marsh.
In a statement, Icat said the transaction is the first step in diversifying its portfolio towards short-tail business underwritten outside the property cat specialist.
Both parties added that the strategic partnership would allow them to leverage underwriting talent across the two companies and share a portion of each other's portfolios.
Icat Syndicate 4242 active underwriter Megan McConnell commented: "Once our sights were set on identifying underwriting opportunities outside of the cat-exposed small commercial property space, we quickly realised that Neon offered an opportunity to partner with an organisation and underwriter we highly respect."
Fisher added that the new $40mn per risk capacity would play a key role in Neon's plans to expand its international presence.