Quanta, Chaucer Holdings and the senior underwriting team of Syndicate 4000 are to set up a new managing agency, Pembroke Managing Agency Limited.
Under the terms of agreement, Chaucer will hold a majority interest in Pembroke, Quanta's capital remains committed to the syndicate, while both Chaucer and Quanta will work together closely to diversify the provision of capital to the syndicate to ensure an orderly transfer of the business management to Pembroke.
Chaucer will agree to provide up to 10% of the secured capital to support underwriting capacity for 2007.
Jim Ritchie, Quanta chairman, said, "I believe that the best way to assure the long-term financial success of the Syndicate is to align the underwriting team with Chaucer and Quanta around the common goal of providing superior underwriting results.
"The Pembroke structure, along with the exceptional skills of the Syndicate 4000 underwriting team, are designed to do just that."
Bob Lippincott, Quanta's interim CEO, said: "This agreement is consistent with our previously stated support of Syndicate 4000 and its efforts to diversify its base by attracting new capital into a good market serviced by a great underwriting team.
"This new joint venture accomplishes three key objectives: it preserves the value of Quanta's investment in Syndicate 4000, enables us to realize the underwriting results from the Syndicate's existing portfolio and allows us to share in the results of future underwriting while building intrinsic value.
"We believe that the Syndicate management team has built an impressive operation and we look forward to the continued success of Syndicate 4000."
