Duperreault to pioneer fresh approach to risk
Brian Duperreault, the insurance industry veteran who will head up Hamilton Insurance Group, the Bermuda holding company set to acquire SAC Re, believes the company can set new standards in the way advances in data analytics, research, and technology will be harnessed to better understand risk.
The Bermuda insurance group is backed by a number of investors including Two Sigma Investments, Capital Z Partners, Performance Equity Management and additional large institutional investors that have not been publicly named yet.
Two Sigma Investments is a technology company that applies a rigorous, scientific method-based approach to investment management. The new company hopes to apply this approach to the insurance industry in a way that has not been seen before. Two Sigma will also act as the sole investment manager for Hamilton Re’s investable assets.
Hamilton has entered into a definitive agreement to acquire SAC Re, the reinsurance arm of SAC Capital Advisors formed in 2012 with $500 million in capital. Led by billionaire Steven Cohen, SAC Capital Advisors recently pleaded guilty to insider trading and are negotiating a settlement with the authorities.
As part of that, SAC has agreed to give up managing outside investors' money, which would prevent it investing premiums for a reinsurance company. The allegations have also hindered the growth of SAC Re making a sale almost inevitable.
But the result of the deal sees the formation of a new insurance group with global ambitions potentially approaching the market in a different way. It will combine the experience of its CEO Duperreault, the former chief of ACE and Marsh & McLennan Companies, with the data analytics, research, and technology innovations pioneered by Two Sigma.
“We believe that there is a significant opportunity to bring a fresh approach to insurance and reinsurance, one based not just on world-class underwriting, but also a strong foundation of large data analytics, research, and fully-integrated technology. I am very excited to partner with Two Sigma in this endeavor,” said Duperreault.
“Two Sigma and I have been working together towards the launch of a new company in the industry and this transaction provides the ability to move forward on an accelerated timetable with a strong team in Bermuda.”
Jonathan Reiss, chief financial officer for SAC Re, said: “We have had a successful first year of underwriting and performance and are excited about this new chapter for the Company. This provides clarity for our clients and our regulators and we are confident Hamilton has a bright future ahead.”
The transaction is expected to be completed by the second half of December 2013 subject to approval from the Bermuda Monetary Authority. Skadden, Arps, Slate, Meagher & Flom and Appleby (Bermuda) have served as legal counsel to Hamilton Insurance Group.
