Run-off specialist DARAG consolidates move into North America with acquisition
Run-off specialist DARAG has completed the acquisition of SOBC Services, a company focused on the sourcing, acquisition and management of insurance entities and portfolios in run off in the US, Bermuda and Caribbean.
The deal, which includes taking on four insurance entities in run-off and a protected cell company in Connecticut, cements the company’s footprint in the North American market. It said it also expects rapid growth in the market driven by the small to mid-sized run-off space.
Stephanie Mocatta will be CEO of this US focused legacy business, which will trade under the name SOBC DARAG. Brian Johnston will be CFO and EVP and Tom Hodson, general counsel. The executive team is complemented by nine other staff, primarily based in Ohio, with US claims, financial, regulatory and operational experience.
The acquisition has been completed via SOBC DARAG Holdings, a wholly owned subsidiary of DARAG Guernsey.
In addition, SOBC DARAG Holdings will acquire from SOBC Corp and SOBC Sandell Holdings, four insurance entities in run-off and SOBC Insurance Company a protected cell company.
The entities in run off are: American Safety Captive Insurance Company in Vermont, which wrote general and professional liability; American Staffing Assurance Company, a protected cell company domiciled in Washington DC which wrote workers’ compensation and general liability protection to temporary staffing agencies; PIA Professional Liability Insurance Company, a captive insurer in Montana, which issued errors and omissions coverage to professional insurance agents; and the economic interest in the Insuratex cell in Bermuda which contains auto liability, general liability and workers’ compensation risks.
Following its recent acquisition of Peachtree in Florida and the change of control approvals for the other entities, SOBC DARAG will own six carriers across the US and Bermuda.
The company stated: “Building on this strong infrastructure base in the US and given an excellent pipeline of transactions, SOBC DARAG is expected to see fast expansion in the small to mid-sized run-off space, whilst also challenging the traditional players at the larger end of the market. The existing SOBC staff, including all the executive team, have transferred to the new operation with immediate effect.”
Mocatta, CEO of SOBC DARAG, said: “This transaction marks a great new chapter. With the capital and expertise of the DARAG Group now fully behind us, we believe there is significant opportunity to develop and grow SOBC DARAG. We have already completed the Peachtree Casualty Insurance Company acquisition and are actively working on a number of other new opportunities. We look forward to the considerable expansion of SOBC DARAG here in the USA as well as in Bermuda and the Caribbean. We would also like to thank our previous capital partners, Sandell, for their support. We have enjoyed working with them for the past 24 months.”
Tom Booth, group CEO of DARAG, said: “Following the equity commitment of €260m ($300m) in July, DARAG announced its intention to expand into the USA and Bermuda markets. The acquisition of SOBC Services via DARAG Guernsey’s wholly owned subsidiary SOBC DARAG Holdings in Delaware, brings onboard an exceptional team of seasoned local professionals. Together with the insurance entities being purchased from the SOBC Group this provides us with a great platform for our future expansion plans in the US legacy market. We have worked closely with the SOBC team on these acquisitions and we are looking forward to continuing our work together and to considerable growth in the coming months and years.”
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