AFG sells Neon to RiverStone as it exits Lloyd's insurance market

American Financial Group (AFG), the parent company of Lloyd's of London insurer Neon, has signed a definitive agreement to sell GAI Holding Bermuda and its subsidiaries to RiverStone Holdings.

The transaction will complete AFG’s exit from the Lloyd’s of London insurance market. Neon was placed in run-off by AFG at the start of the year with plans to reallocate capital to its other insurance businesses.

Upon closing, AFG expects release of all of its funds at Lloyd’s (FAL) including release of the letters of credit and collateral pledge facility that AFG guarantees in support of Neon’s FAL.

Subject to regulatory approvals, the transaction is expected to close in the fourth quarter of 2020. TigerRisk Capital Markets & Advisory acted as exclusive financial advisor to AFG.

Carl Lindner III, co-chief executive officer, said: “The sale of Neon finalizes AFG’s exit from the Lloyd’s market, following AFG’s decision to place this business into run-off effective in the fourth quarter of 2019. The exit allows us to provide continued focus on our other Specialty P&C businesses and enables us to redeploy capital, increase earnings and returns, and create long-term value for our shareholders.”

Luke Tanzer, RiverStone’s UK managing director stated: “We are delighted that AFG has selected RiverStone as their partner for this transaction. We have worked closely and collaboratively with AFG to ensure that their strategic objectives are achieved through this transaction, and we will ensure that Neon insureds continue to receive the highest possible level of service.”