California-based specialty insurance holding company K2 Insurance Services is acquiring London-based Pioneer Underwriters.
Pioneer will form the cornerstone for a new international platform of K2. This will initially include the Pioneer offerings in property catastrophe reinsurance, financial institutions, international property facultative and marine specialty along with the support staff, together writing approximately £150m gross written premium in 2020.
The transaction will be the first acquisition for K2 outside the U.S.
Last May, K2 recapitalized with a new private equity partner, Lee Equity Partners. As part of that transaction, K2’s specialty insurance carrier, Aegis Security Insurance Co., was spun off and remains under the ownership of its K2’s original equity partner, Endeavour Capital, and Patrick Kilkenny, K2’s chairman who along with Kimmel founded K2 in 2011. K2 acquired Aegis Security Inc. in 2013 for an undisclosed amount. Aegis Security specializes in insurance for manufactured homes, motorcycles, travel trailers, select-value dwellings and other specialty insurance products.
K2 was formed in 2011 by Kilkenny and Kimmel, in partnership with investment firm Endeavour Capital. Kilkenny formerly ran and owned Arrowhead General Insurance. Kimmel served as executive vice president and MGA Practice leader at Guy Carpenter.
“K2 is a highly successful business in the U.S. and its vision of building a broad, high quality and service driven group of expert underwriting businesses, now with an expanding international focus, has clear appeal for our underwriting teams and support staff, as well as significant benefit for our customers and capacity providers.” Andrew McMellin, chief executive officer of Pioneer. McMellin joined Pioneer in 2018 following a long career at XL Catlin.
Bob Kimmel, CEO of K2, said Pioneer’s underwriting, customer commitment and capital relationships are an “excellent fit” for K2. “We look forward to working closely with them as we build an international distribution platform to complement our successful existing U.S. business,” he said.
As a managing general agency, Pioneer underwrites on behalf of more than 20 Lloyd’s and non-Lloyd’s capital providers.
Pioneer undertook a strategic review last year that resulted in the withdrawal from certain lines of business and its putting its Lloyd’s Syndicate 1980 into run-off in November.
At that time, Pioneer said it was working with investment bank Canaccord Genuity to explore capital options for future growth, and was in advanced discussions with a number of potential investors.
Pioneer has offices in London, Zurich and Brussels as well as in the U.S. cities of New York, Philadelphia, Atlanta and Seattle.
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