You might be forgiven for thinking that the story of Ironshore Insurance, the latest addition to Bermuda?s Class 4 register, was a familiar one. A billion dollars of clean capital, managed by proven industry talent, filling in a gap in the property catastrophe market: we?ve heard it all before.

Except that Ironshore is a different story altogether, a new direction for the ever-developing Bermuda insurance market, albeit from a company with all the attributes mentioned. For Ironshore is an insurance company, a net writer of primary insurance, the logical conclusion of a process that began when the Class of 2001 identified the opportunity to write both reinsurance, Bermuda?s mainstay, and insurance.

Ironshore?s focus on primary business thus completes the circle started 20 years earlier by ACE and the company that would become XL Capital. Two men started that circle: Robert Clements and Robert Newhouse. The two formed several companies apiece in the past two decades, but with Ironshore, Mr. Clements takes what will probably prove to be an unassailable lead over his former colleague. Mr. Clements, who founded Ironshore with his son John, was also the founder of ACE, XL, Mid Ocean Re, SCUUL, Arch Capital, and broker Integro, among others.

Two days after Ironshore opened its doors for business, its three senior executives met with at the company?s offices in the Swan Building on Victoria Street. Bob Deutsch is Ironshore?s chief executive officer; Les Rock its chief underwriting officer; and Mitch Blaser its chief financial officer. : How easy was it to raise capital for Ironshore?: We started in October and visited many potential private investors. It came together with a group of five high-quality lead investors, who invested over $900 million between them: Bear Stearns Merchant Banking, Corporate Partners (a business unit of Lazard Alternative Investments), Fremont Partners, TowerBrook Capital Partners and Greenhill Capital Partners.

Each of us has invested substantially, as have Bob Clements and his son John. Everyone who works for the company will share in the potential upside.: What was Integro?s involvement in the formation of Ironshore?: Integro was a sponsor of Ironshore. They initiated the idea, with Bob and John Clements, of recognising the shortfall of adequate insurance capacity in the property business. Integro also provided some IT and office support along the way during our formation stage. They received a fee for that at closing. Going forward, our relationship with Integro is exactly identical to our relationship with every other broker. Integro is not a shareholder of Ironshore.: Where does the name Ironshore come from?: Ironshore Inc., the parent, is a Cayman Islands company. Ironshore is a type of coral found off the Cayman Islands. It?s a name that Bob Clements came up with. Ironshore is very resilient, sturdy, secure material. We think that those attributes fit Ironshore Insurance.: You?ll write insurance, not reinsurance?: Our focus is on insurance and we think that is one of the aspects that will make us unique on the Island. We?ve seen a lot of capital flow into the business. Virtually all of it has been in the form of reinsurance or sidecars. Very little has come in the way of insurance, and we think that presents a unique opportunity for Ironshore.: On the US coasts, but not exclusively in that region?: The rationale for starting the company was the shortage of insurance, especially in those regions, but longer term, six months out, our profile will be that of a world-wide company with different product lines, principally in the property area.: How hard is the market for insurance in those regions at this time?: Very hard. The hurricanes in 2004 and 2005 created a massive shortage of supply. You combine that with changes imposed by the rating agencies, the revised forecasting models, issues about companies? ability to withstand earnings volatility and a host of other factors such as reinsurance pricing, and you have a hard market. Even though 2006 was a very benign hurricane season, we?re not seeing a let-up in primary pricing, nor in reinsurance pricing. In fact, people are talking about property cat reinsurance pricing at January 1, 2007 being higher than at the previous January 1. That?s due, in part, to the influence of the changes in the forecasting models. : You opened for business on January 2. How advanced are you?: We?re well advanced on the technology and finance sides. We?ve built an underwriting technology system that we?re using today in our quoting process. We were operational from the moment we started, including finding this office space.Deutsch: We started with eight employees and two consultants, and another three employees will join us soon. Mitch and I have been recruiting talent for the last couple of months.: Do you have any employees Bermudians might be familiar with?: Alan Pailing is here. He was with XL for many years. Our office manager is Nicky Madeiros, who has worked with several Bermuda companies. And we expect several more to join.: How much do you expect to write in the first year?: We?re projecting $500 million in gross premiums in 2007, and that should grow by double-digit percentage points each year.: Will you buy reinsurance?: At the moment, we would only buy selective facultative reinsurance, and we would want to make sure that the quality of the reinsurer was top notch. The treaty reinsurance pricing we?ve seen out there is not the best use of our shareholder capital. So we are planning to keep everything net, to start with.: Will you have a London presence at some stage?: Yes, at some stage. I have some expertise at Lloyd?s, and more importantly, because of Lloyd?s broad licensing and rating, it helps with world-wide activity. So, yes, we hope to have a Lloyd?s presence at some stage this year. I imagine some of the smaller risks will come through London, and the larger risks will stay in Bermuda.: In the past, where Robert Clements has gone, others have followed. Is the market firm enough to allow other large start-ups to arrive?: I believe that the demand for our product far exceeds what we will be able to provide. The biggest challenge to forming a primary insurance company deals with the talent and the infrastructure. It is easier to form a reinsurance company than an insurance company. We believe that our underwriting team affords us a sustainable competitive advantage.