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Torus withdraws from excess casualty

Relative newcomer Torus's withdrawal from the excess liability market in March was hastened by last year's heavy loss experience in the segment, sources suggest.

In March, The Insurance Insider revealed that Bermudian-headquartered Torus had parted with David Perez, president and chief underwriting officer of its global casualty operations.

Torus Insurance said it pulled out of writing excess liability through its Bermuda operations because of "extremely challenging" conditions for the business.

Leaving potential offshore liability claims from Deepwater Horizon aside, the liability losses from onshore energy business alone are set to cost the market over $800mn in 2010, our sister title Inside FAC revealed in December.

The Insurance Insider also revealed the US-focused Bermudian excess casualty market bore the brunt of September 2010's Pacific Gas & Electric Corporation (PGEC) gas pipeline explosion at San Bruno near San Francisco.

Marsh places the $1bn PGEC insurance programme. It is understood Torus had a $50mn total participation, writing a $25mn line on a $75mn in excess of $120mn layer as well as on a layer $50mn in excess of $340mn.

However, it is thought that Torus Bermuda's participations typically attached at around a $300mn excess point.

The PGEC loss followed a July 2010 spill for Calgary-based Enbridge Energy Partners from a pipeline rupture in July and the release of 819,000 gallons of oil into a Lake Michigan tributary, with claims estimated at $491mn.

The Bermudian excess casualty market also looks set for another significant loss from an oil pipeline rupture following a blast at Mexico's state-owned Petróleos Mexicanos (Pemex) in December.

The Pemex programme is one of the biggest in the energy market, and is understood to be placed by Aon retail in Houston and wholesaled into international markets from there.

Perez joined Torus Bermuda in October 2008 from American International Group, where he managed the largest portfolio of lead umbrella business in the US, and ran a high excess casualty capacity offshore subsidiary.

Torus said that following the Bermuda exit from excess liability it would continue to offer existing liability products through its US casualty unit, its European specialty arm and through Torus Re.

Torus chief executive Clive Tobin said: "We see no near-term signs of the anticipated and much needed improvement in conditions.

"Against this backdrop, it will be increasingly difficult to achieve the necessary scale and returns for Bermuda within an acceptable timeframe."

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