Bermuda-based re/insurer Catlin Group Ltd announced yesterday that its Swiss reinsurance unit had gained approval from Swiss Financial Market Supervisory Authority to begin operating.

Catlin Re Switzerland Ltd. will be capitalised with approximately $1.1 billion.

In a statement yesterday, the company said the formation of the Swiss reinsurance unit was “a major development in the Catlin Group’s international expansion and distribution strategy”.

The Swiss company is a subsidiary of Catlin Bermuda and will establish a Bermuda branch, “initially to underwrite reinsurance of various Catlin Group subsidiaries”, the company said.

Catlin Re Switzerland will underwrite property and other classes of specialty reinsurance for European ceding companies as well as trade credit surety and political risk reinsurance on a global basis.

The company will expand its portfolio of European treaty reinsurance business as market conditions justify, building on the existing book of reinsurance business that has been developed and underwritten by Catlin’s European offices over the past seven years.

Standard & Poor’s Ratings Services said last month that it expects to assign a long-term financial strength rating of ‘A’ to Catlin Re Switzerland as a core subsidiary of the Catlin Group, subject to capitalisation of the company and receipt of all necessary regulatory approvals.

Peter Schmidt, chief executive of Catlin Re Switzerland, said: “Our ambition is to build Catlin Re Switzerland over time to become a leading European specialty reinsurer. We are pleased that Catlin Re Switzerland can now serve clients for the upcoming 1 January 2011 renewals.”