Flagstone Re will be celebrating five years in business next month having grown from a small local company to a fully-fledged global operation.

The re/insurer, which started up as one of the Class of 2005 in the wake of hurricanes Katrina, Rita and Wilma, has undergone some big changes in a small space of time, shifting from the need for capacity in a hard market to an over-capitalised soft market.

And the company plans to leverage its key strengths in underwriting and technology to develop its business in the future, having moved its operating company from Bermuda to Switzerland in October 2008 and relocated its holding company to Luxembourg in May this year as it expanded its worldwide network.

The celebrations, which kicked off with a party for Flagstone's partners and brokers at LV's last night, mark half a decade of success since the company's inception on December 20, 2005 when it received its first rating from AM Best Co.

But the planning and strategy for the business began in earnest well before then so the company was ready to launch in full stride for the January 1, 2006 renewal season, according to Brent Slade, chief marketing officer at Flagstone Réassurance Suisse SA — Bermuda Branch, as the company is now called.

"We started right out of the gate with a very successful initial January 1 season when we first started writing business," he said.

Instrumental to the re/insurer's early success was the work of Gray Prestia, chief underwriting officer for North America, and Guy Swayne, chief underwriting officer for international, both of whom have approximately 25 years' experience in the industry, with the company writing $86 million worth of business in its first quarter.

Flagstone raised about $551 million in capital after expenses to get underway and wrote $300 million during 2006, post Katrina, Rita and Wilma, said Mr. Prestia.

"It is very pleasing to have that level of support from clients and brokers right out of the box," he said. "We had clients who wanted to do business with us from day one."

Having surpassed its plans and targets for the first year through its significant book of business and platform, the re/insurer decided to issue a successful initial public offering in March 2007 and subsequently listed on the New York Stock Exchange the next month.

On the domestic front, the company listed on the Bermuda Stock Exchange (BSX) in December 2007 and listed cat bond Valais Re on the BSX in June 2008 and Montana Re a year later in December 2009.

Flagstone's success was borne out through the presentation of several awards in recognition of its work, culminating in being voted Reinsurance Company of the Year by industry publication The Review magazine in August 2010, a large part of which Mr. Prestia attributes to the company's underwriting strength.

"I think our success is down to the focus on our underwriting strength and the high level of service that we deploy as reflected in the number of awards that we have won," he said.

Mr. Prestia cited the dramatic transition of the market from the need for capacity after the 2004 and 2005 hurricane seasons to the lack of significant events in the US, with the exception of Hurricane Ike in 2009, resulting in an over capitalisation.

In the past couple of years alone, he said, the incidence of big catastrophes across the world, such as the Deepwater Horizon oil spill disaster and the earthquakes in Chile and New Zealand, had increased in both their scale and frequency.

At the same time Flagstone has expanded its global presence with the acquisition of Marlborough Underwriting Agency Ltd., the managing agency for Lloyd's Syndicate 1861 — a Lloyd's syndicate underwriting a specialist portfolio of short tail re/insurance, from the Berkshire Hathaway Group.

"We have gone from a small Bermuda operation to establishing offices around the world and having a globally diversified book of business took a lot of growth and energy, but during this time the underwriting results have remained stellar," said Mr. Slade.

Indeed the company's investment in technology has reaped its rewards, enabling it to focus on the quantitative side of the business written, he said.

Despite the re/insurer moving its operating and holding companies to Europe, Mr. Slade believes that it is important to maintain Bermuda as a vibrant and growing market with interaction between the people on the ground, as evidenced by Flagstone's North American and catastrophe business based on the Island.

The company has grown from a team of five executives and 20 staff to 480 worldwide, including 50 in the Bermuda office, but the decision to relocate its domicile was not taken lightly by either the firm or its new jurisdictions, he said.

The pair of Mr. Slade and Mr. Prestia do not anticipate much growth during 2011 and 2012 due to the soft market conditions and said that Flagstone will be looking more at share buybacks and getting better value from its current business model through continued strong underwriting a solid capitalisation.

They will face the additional challenge of regulatory requirements like Solvency II, but thanks to an innovative and flexible approach to business believe they will be able to adapt to the ever-evolving re/insurance market.