Enstar Group Ltd. and Stone Point Capital LLC announced they have signed definitive agreements to sell StarStone Underwriting Ltd. (SUL), the Lloyd’s managing agency, together with the right to operate Lloyd’s Syndicate 1301, to Inigo Ltd., a new specialty re/insurance holding company.
Enstar, Stone Point and Dowling Capital Partners’ funds — StarStone’s ultimate parent companies — will receive $30 million of consideration from the sale of SUL in the form of Inigo shares upon closing. In addition, Enstar and Stone Point will commit to invest up to $27 million and $18 million, respectively, into Inigo.
Inigo is led by its founders (and former Hiscox executives) Richard Watson, Russell Merrett and Stuart Bridges. Inigo will operate as a Lloyd’s specialty insurer writing a streamlined portfolio of insurance and reinsurance risks and will receive certain transitional services and staff from Enstar. (Watson was Hiscox’s former chief underwriting officer; Merrett was the former managing director of Hiscox London Market, and Bridges was the insurer’s former group chief financial officer).
In conjunction with the transaction, Enstar, Stone Point and Dowling Capital will retain the economics of Syndicate 1301’s 2020 and prior years’ underwriting portfolios as this business runs off.
The Inigo investment is expected to close in late 2020 and the SUL sale is expected to close in the first half of 2021, subject to regulatory approvals and satisfaction of customary conditions.
Dominic Silvester, Enstar’s chief executive officer, said: “This transaction optimizes and capitalizes on StarStone International’s assets at Lloyd’s and provides an opportunity to participate in a new venture with proven leadership at a time of favourable market conditions. This is a positive outcome for SUL, and we look forward to working with the Inigo management team as they launch this new business.”
The SUL sale follows the previously announced decision by Enstar and Stone Point to place StarStone’s International business into an orderly run-off and review strategic alternatives for the business. In addition to the SUL sale, Enstar and Stone Point recently agreed to a renewal rights transaction for StarStone’s European Financial Lines business, as well as the sale of Belgian-based underwriting agent Vander Haeghen, part of the StarStone International Group.
Enstar Group Ltd. announced in June it has increased the capitalization of its specialty property/casualty insurance subsidiary StarStone U.S. Holdings Inc., by $630 million. StarStone was purchased by Enstar Group in 2014.
Enstar is a NASDAQ-listed global insurance group that offers capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. A specialist in legacy acquisitions, Enstar has acquired over 100 companies and portfolios since its formation in 2001.
About Stone Point
Stone Point Capital LLC is a financial services-focused private equity firm. The firm has raised and managed eight private equity funds – the Trident Funds – with aggregate committed capital of more than $25 billion. Stone Point targets investments in companies in the global financial services industry and related sectors.
Source: Enstar Group
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