Private Equity Investors Pelican Ventures, J.C. Flowers to Buy Ariel Re from Argo Group

November 2, 2020

Pelican Ventures and J.C. Flowers & Co., both private equity investors with significant insurance expertise, announced they have agreed to acquire reinsurance franchise Ariel Re from Argo Group for an undisclosed sum.

Ariel Re is a global underwriter of property and casualty reinsurance operating through Lloyd’s Syndicate 1910. Argo purchased Ariel Re in February 2017.

Argo Group recently has taken a series of steps to restructure its business after some poor results and a leadership change. In a September 2020 presentation for investors, the company indicated units with $500 million or more in premiums are under review. Last fall the company exited Asia’s insurance market and global hull business and earlier this year it sold its Trident Pubic Risk Solutions unit to Paragon MGA. Argo’s Lloyd’s insurer, ArgoGlobal, announced in October a reinsurance-to-close (RITC) transaction with legacy specialist RiverStone Holdings for Syndicate 1200 for 2017 and prior years. Last week, Argo announced it was putting its grocery and retail lines of business into run-off.

As part of the Ariel Re deal, Pelican Ventures and J.C. Flowers also announced that they have agreed on terms for an operational partnership with Apollo Syndicate Management Ltd. to further develop SPA 6133, a Lloyd’s special purpose arrangement (SPA) focused on property catastrophe reinsurance. Under the partnership, Pelican Ventures and J.C. Flowers will provide additional capital, operational support and distribution.

Ryan Mather, Ariel Re’s former CEO, will return to Ariel Re to run the business and oversee underwriting for both syndicates.

“Our vision is to make Ariel Re the premier manager of reinsurance risk. Our ability to act independently will enable us to provide greater value to customers, bring fresh capital to the marketplace and enable third-party capital providers to benefit from our team’s industry expertise,” commented Mather.

“Pairing Ariel Re with SPA 6133 will create significant growth and economies of scale for our franchise, allowing us to be more efficient for our capital providers and effective to our clients,” he said. “We will continue to work closely with our clients and business partners to offer solutions in these challenging markets.”

Pelican Ventures, an investment firm with a sole focus on the insurance industry, includes RenaissanceRe founder and former TigerRisk Partners Chairman and Co-Founder Jim Stanard, as well as catastrophe modeling pioneer Jayant Khadilkar. Stanard will become Ariel’s non-executive chairman while Khadilkar will act as a special adviser focusing on modeling, analytics and technology.

“Pelican Ventures is excited to be investing in Ariel Re and SPA 6133 and bringing together talented professionals with unparalleled reinsurance market underwriting expertise and risk management analysis skills. With the financial strength and insights of our new ownership group and under the leadership of Ryan Mather, we will pursue our ambition of building a world-class manager of reinsurance risk,” said Stanard.

TigerRisk Capital Markets & Advisory is acting as exclusive financial advisor to Pelican Ventures and J.C. Flowers in this transaction. DLA Piper is acting as legal adviser.

About Ariel Re

Originally founded in 2005, Ariel Re has been part of Argo Group International Holdings Ltd. since 2017. Ariel Re transacts a broad array of catastrophe and specialty reinsurance business through offices in Bermuda, London, Hong Kong and Brussels. Ariel Re principally operates through Lloyd’s Syndicate 1910.

About SPA 6133

SPA 6133 is a catastrophe-focused SPA which reinsures property treaty business written by Apollo Syndicate 1969 and is managed by Apollo Syndicate Management Ltd. It launched in 2018 with a stamp capacity of £35 million and has grown to a stamp capacity of £65 million in 2021.

About Pelican Ventures

Pelican Ventures is a private investment firm with a sole focus on the insurance industry established by world-class insurance executives with a proven track record of founding, growing and operating some of the industry’s most enduring and successful franchises. Pelican Ventures was formed by industry veteran Jim Stanard, Founder and former Chairman and CEO of RenaissanceRe and former TigerRisk Partners chairman and co-founder.

About J.C. Flowers & Co.

With offices in New York and London, J.C. Flowers is a private investment firm dedicated to investing globally in the financial services industry. Founded in 1998, the firm has invested more than $16 billion of capital, including co-investment, in 56 portfolio companies in 18 countries across a range of industry subsectors including banking, insurance and reinsurance, securities firms, specialty finance, and services and asset management.

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