Max Capital Expands Into Professional Liability Insurance

After its unsuccessful merger attempt with IPC Holdings Ltd., Max Capital Group Ltd. is dusting itself off and is expanding into professional liability insurance.

Max Capital said its Richmond, Va.-based excess and surplus lines writer, Max Specialty Insurance Co., is underwriting professional liability business, including errors and omissions for architects, engineers, lawyers, insurance agents, technology and miscellaneous classes.

Edward P. Neuberger has been named vice president of professional liability, and will lead the new unit. Neuberger comes to Max from James River Insurance Co., where he was division manager of professional liability.

"The development of a professional liability underwriting capability at Max Specialty represents a further step in our strategic plan to diversify the operations of Max and to build out the distinctive specialty underwriting capabilities of Max Specialty, the U.S. E&S operation we established in 2007," said W. Marston Becker, chairman and chief executive officer of Max Capital, said in a statement.

Stephen J. Vaccaro Jr., president and CEO of Max Specialty Insurance Co., said the company expects to appoint national, regional and specialty wholesalers for the new business. Also, the company will concentrate on accounts producing a minimum annual premium of $2,500, but the average premium per account is expected to fall between $15,000 and $25,000.

In March, IPC and Max Capital announced plans to merge to form the sixth-largest global underwriter in Bermuda. The combined company would have been named Max Capital Group and would have had $3 billion in shareholder equity and total assets of about $10 billion (BestWire, March 3, 2009). Validus Holdings entered the picture after that announcement, offering a counteroffer it said would be better for IPC shareholders. IPC shareholders voted down the Max merger proposal June 12, and Max responded by withdrawing its bid for the company (BestWire, June 12, 2009).

Max Specialty Insurance Co. currently has a Best's Financial Strength Rating of A- (Excellent).

Max Capital shares were trading at $18.49 a share on the morning of June 25, up 0.05% from the previous close.

(By Meg Green, senior associate editor, BestWeek: Meg.Green@ambest.com)