The latest is Lloyd’s underwriting group Beazley which has revealed it has opened discussions with members’ agents at Lloyd’s over the potential creation of a special purpose syndicate (SPS) to operate as a reinsurance “sidecar” to Beazley’s treaty account.

The firm said that the move was aimed at “capitalising on Beazley’s position in the treaty reinsurance market”, and comes as treaty rates continue to rise as do expectations that the rates will not flatten in 2010. 

In a statement to announce the sidecar proposal Beazley said that it had been underwriting treaty reinsurance since the company’s formation in 1986 and currently leads approximately 40% of the catastrophe excess of loss property business written and 35% of per risk excess of loss property business.

“Rates on renewal business underwritten by the Beazley treaty team rose by an average of 10% in the first six months of 2009 and demand for our capacity is currently strong,” it said.

“The proposed creation of a special purpose syndicate is motivated by a medium term strategic objective to increase line size,” added Beazley. “The SPS would be expected to write business through the 2010-2012 years of account, with the intention to retain capacity beyond 2012."

The news comes as delegates prepare to head for Monte Carlo for the annual Reinsurance Rendezvous with many in the market expecting a tough stance from the underwriters as capital concerns and weakened balance sheets continue despite the lack of a major catastrophe loss so far this year.