AXIS Capital Holdings Ltd. announced it is acquiring Novae Group plc, a specialty re/insurer that operates through Lloyd’s of London.
“The US$604 million transaction adds scale and breadth to the international specialty insurance business of AXIS, creating a $2 billion insurer in the London specialty market anchored as a top 10 insurer at Lloyd’s,” said a prepared statement from Bermuda-based AXIS.
Based on 2016 results, the combined companies will create a global specialty re/insurer with gross written premiums in excess of $6 billion, the company added.
In 2015, AXIS had set its sights on acquiring Bermuda-based PartnerRe – but lost out to EXOR SpA, the Agnelli family’s investment company, which purchased PartnerRe for approximately $6.9 billion.
“A key component of our growth strategy is to have leadership positions, relevance and scale in each of the specialty risk markets where we choose to compete,” said Albert Benchimol, president and CEO of AXIS Capital, in comments about the Novae deal.
“The acquisition of Novae is a great opportunity to accelerate the breadth and depth of talent, lines of business, and leadership positions that we are developing in the London market for specialty risks, advancing our growth and enabling us to better serve our clients,” he said.
AXIS Capital also announced that, following the completion of the transaction, Novae CEO Matthew Fosh will be appointed the company’s executive chair, Europe, and will report to Benchimol.
“By joining AXIS, we are becoming part of a global leader in specialty insurance and reinsurance. AXIS is an ideal partner for Novae’s clients and our employees – and I am particularly enthused for our employees who will benefit from having access to the financial strength of a major global carrier and to the enhanced tools, support and resources required to grow our portfolio of underwriting businesses,” said Fosh.
“Our organizations share like-minded corporate cultures grounded in a client-centric, innovative and entrepreneurial mentality. Moreover, our businesses are highly complementary, creating significant potential for our combined platform,” he added.
Among his new responsibilities, Fosh will help guide the integration of the two businesses. Additionally, Robert Forster, Novae chief underwriting officer, will have a senior underwriting management role on the leadership team of AXIS’ international insurance division, which is led by CEO Mark Gregory.
“By acquiring Novae, we are strengthening our position in the London market while bringing aboard a complementary business and tremendous talent. Novae is known for its market-leading underwriting talent, who we expect will thrive at AXIS and we are so glad to welcome them to our team,” said Peter Wilson, CEO of AXIS Insurance.
The transaction is subject to regulatory approval and other customary closing conditions and is expected to close in the fourth quarter of this year. Credit Suisse International and Fenchurch Advisory Partners are acting as financial advisers to AXIS Capital.
Ratings agency A.M. Best commented that the credit ratings for AXIS Specialty Ltd. and its operating affiliates remain stable with a Financial Strength Rating of “A+” and Long-Term Issuer Credit Rating of “aa-“.
AXIS Specialty’s parent, AXIS Capital Holdings, also had an unchanged Long-Term ICR of “a-“, said A.M. Best, noting that the outlook for these credit ratings remains stable.
Source: AXIS Capital/A.M. Best
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