XL and Stone Point Form New Bermuda Company for ILS Market Products

July 26, 2013

XL Group and private equity firm Stone Point Capital LLC have announced the formation of a new Bermuda-based company to act as an investment manager in insurance-linked securities (ILS) and other reinsurance capital markets products.

XL said it “has a 75 percent ownership stake in the company and funds managed by Stone Point have the remaining 25 percent ownership.

“When operations are fully commenced, the focus of the company will be on ILS and index-linked products as well as on XL-designed reinsurance products,” the bulletin explained. “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 unique access to both reinsurance capital markets products as well as more traditional reinsurance opportunities, including certain risks currently written by XL. Investors will also benefit from XL’s underwriting excellence, strong enterprise risk management, analytical strength and respected insight in the reinsurance market.”

XL’s CEO Mike McGavick, commented: “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.”

Stone Point’s CEO Charles A. Davis 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.”

Source: XL Group plc

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