26 July 2013 News

XL and Stone Point form ILS company

XL Group and private equity firm, Stone Point Capital, have formed a Bermuda-based company which will act as an investment manager in insurance-linked securities (ILS) and other reinsurance capital markets products.

The focus of the company, which will see XL with a 75 percent ownership stake and funds managed by Stone Point at 25 percent, will be on ILS and index-linked products as well as on XL-designed reinsurance products. The parties intend to invest up to an aggregate of $135 million in funds to be formed, alongside potential third party investors.

The new company will offer investors access to both capital markets and traditional products, including certain risks currently written by XL.

“Given the combined strength of XL’s 20-plus years of world-class reinsurance underwriting expertise and Stone Point’s proven track record of investment success in the insurance and reinsurance sectors, this initiative fits perfectly with XL’s continuing objective to offer innovative products to our clients and enhance profitability and long term value for shareholders,” said XL chief executive officer, Mike McGavick.

Charles Davis, Stone Point’s chief executive officer, added: “Stone Point is delighted to be partnering with XL on this venture.  Stone Point’s relationship with XL dates back to 1986 when our team assisted with the formation of the company. We believe that the convergence of the traditional insurance and reinsurance markets, and the capital markets will continue.  This initiative with XL is designed to offer third-party investors an opportunity to invest in this asset class in partnership with one of the world’s premiere reinsurance underwriters.”

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