Brit confirms its intention to float

Specialty insurer and reinsurer Brit Insurance has confirmed its plans to float on the London Stock Exchange. The offering, likely to take place in April, could value the company at as much as £1 billion.

Brit said that its existing shareholders the private equity groups Apollo Global Management and CVC Capital Partners will look to release part of the investment in the group through the IPO but would also remain substantial shareholders. Brit is unlikely to use the deal to raise fresh capital.

Apollo and CVC took the company private in 2010 for £888m. They have since sold or closed parts of it including its UK general insurance arm for about $300 million. The business now focuses exclusively on specialist corporate insurance and reinsurance at the Lloyd’s market.

Although the group will be unlikely to receive any proceeds from the initial public offering (IPO), the company believes that admission will benefit by giving the group “access to a wider range of capital-raising options which may be of use in the future; and assist in recruiting, retaining and incentivising key management and employees.”

Mark Cloutier, CEO of Brit Group, said: “We are very pleased to be bringing Brit to the market following a period of successful change for the business.

“In recent years we have transformed Brit into a global specialty insurer and re-insurer operating through our Lloyd's of London platform. We have sold non-core businesses, focused our underwriting on profitable specialty business lines with short tail risks, and expanded our global distribution in the US, Bermuda and China.

“We have built a stronger investment management capability, and transformed the quality and efficiency of our operating infrastructure. The results of this hard work are seen in our financial performance. Our 24.5% return on net tangible assets in 2013, following 18.5% return in 2012, reflects our ability to create significant value and deliver strong shareholder returns.

“Our simpler, more focused business is now able to take maximum advantage of the global distribution and capital efficiency provided by Lloyd's to generate further profitable growth. We have put in place a strong senior management team focused on a clear strategy, and we are expanding our underwriting teams internationally in select lines of business. We see a number of opportunities ahead and believe we have laid strong foundations for continued outperformance."

Dr. Richard Ward, non-executive chairman of Brit Group, said: “Brit has reshaped itself into a world leader in global specialty insurance and reinsurance. Mark Cloutier has assembled an impressive team who are delivering strong returns founded on disciplined underwriting and a robust risk management framework. Through its expanded international reach the business has further opportunities to grow profitably. I am confident that Brit is well positioned for the next phase of its development as a publicly listed company.”