Fidelis to launch after $1.5bn capital raise
Re/insurer Fidelis Insurance is set to launch after raising $1.5 billion of capital and securing and A- (Excellent) rating from AM Best.
The start-up, which was founded and will be led by Richard Brindle and Neil McConachie, will underwrite re/insurance business principally in the property, energy, marine and aviation risk classes.
Brindle and McConachie are both known for building up Lancashire from a start-up to a London Stock Exchange-listed $2.4 billion market cap company. Brindle will serve as chief executive officer and chief underwriting officer while McConachie will serve as chief financial officer.
The re/insurer said it plans to optimise both the underwriting and asset sides of the balance sheet.
Edward Russell, chief investment officer of Fidelis, will manage the investment portfolio under the direction of the investment committee, working closely with advisor Goldman Sachs’ Alternative Investments & Manager Selection (AIMS) group.
“We are very excited to introduce a new, stronger model to the insurance industry with Fidelis,” said Brindle. “By focusing on either assets or liabilities, legacy insurance models have failed to optimise shareholder returns, and the low returns generated by fixed income investments have been challenging.
“Fidelis will pursue a total return strategy by tactically shifting capital and risk between insurance and investments to maximise our return on equity across market cycles. We hope that others follow this model, as we strongly believe it will be very good for the industry, resulting in more responsible and less volatile underwriting.”
“But we are first and foremost an underwriting company,” Brindle continued. “We have a vastly experienced management team that is strongly supportive of the traditional broker distribution network and has, over decades, developed many strong broker and client relationships. These relationships will sit at the heart of everything we do at Fidelis.”
The founding investors are funds of Crestview Partners, CVC Capital Partners, and Pine Brook, private equity firms who have invested a combined $650 million.
McConachie said: “In addition to seeking returns that outperform peers, we believe the diversification in assets will protect Fidelis against financial market volatility better than a single-manager strategy would.
“Optimising across hard and soft underwriting markets, as well as through different investment cycles makes Fidelis not only a strong new player, but also very attractive for investors looking to reduce downside risk.”
