Fidelis to launch ‘one of the largest MGU globally’ with $3bn+ GWP
Richard Brindle (pictured)-led Fidelis Insurance is to create “one of the largest managing general underwriters globally”, with plans to originate and underwrite over $3 billion of gross written premium across a range of specialty insurance and reinsurance classes of business.
Fidelis intends to separate its business to create a new MGU, subject to regulatory approval, with principal equity investors Capital Z Partners, Travelers, Blackstone, Further Global Capital Management and Alfa Insurance. Blackstone will lead the debt financing.
The MGU will be separated from the existing balance sheet insurance companies to allow each entity to focus on its core functions and specialisms, and serve clients, brokers and other stakeholders.
Upon separation, it is intended that the Fidelis MGU will provide a comprehensive range of services to the Fidelis Balance Sheet Companies, retaining its underwriters and attracting additional talent across the broader Fidelis business.
Fidelis, however, noted that there will be no changes to the way in which the company currently conducts its underwriting from the offices in Bermuda, London and Dublin.
The Fidelis MGU and Fidelis Balance Sheet Companies will continue to underwrite with the same risk appetite, across the three main Fidelis business pillars, including bespoke, reinsurance and specialty. The transaction is expected to bring “significant benefits” to both businesses, with increased flexibility to quickly respond to evolving insurance and reinsurance market conditions and helping to sustain Fidelis’ underwriting results through access to “top talent”.
Pending regulatory approval, the Fidelis Balance Sheet Companies are expected to benefit from providing long-term capacity for the Fidelis MGU along with a number of mechanisms to ensure alignment among the separated companies. All of the capital and risk transfer resources currently available to Fidelis brokers and clients will continue to be available, ensuring a seamless transition from the current to new structure.
The Fidelis MGU will be led by Richard Brindle, who will act as chairman and chief executive officer of the MGU. A number of leading executives from the senior Fidelis team will be retained by the Fidelis Balance Sheet Companies.
Brindle, chairman, group chief executive officer and chief underwriting officer of Fidelis, said: “We are delighted to announce this ground-breaking transaction. The balance sheet companies will have access to our market leading underwriting talent and risk origination, with appropriate structures in place to ensure alignment. I have built my career on underwriting excellence with the support of stable capital providers – from Tarquin to Lancashire and now Fidelis – which will be continued through this transaction.
“Built on the best talent in the market, we are creating an MGU platform that will generate attractive returns for the shareholders of both of the separated businesses. Our success will be defined by the continued delivery of underwriting outperformance, aligned with our long-term philosophy of writing insurance and reinsurance in areas where deep expertise is required to deliver through the cycle. We look forward to the start of a long term and successful partnership between the companies.”
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