Fidelis approved for MGU creation
Principal equity investors in Fidelis's managing general underwriter will be Capital Z Partners, Travelers Companies, Blackstone, Further Global Capital Management and Alfa Insurance
Regulators in the UK, Bermuda, Belgium and Ireland give green light to creation of a managing general underwriter alongside Bermuda-based group’s balance sheet businesses
Fidelis Insurance Holdings has received regulatory approval for the creation of a separate managing general underwriter alongside its existing rated insurance entities.
The Bermuda-group announced in July plans to create Fidelis MGU alongside its balance sheet businesses within Fidelis Insurance Group.
At the time, Fidelis said the structure could allow the MGU business to seek new sources of investment and capital to underwrite more than $3bn of gross premiums globally across a range of specialty re/insurance lines. This would make it one of the largest MGUs globally.
The Fidelis MGU will be led by chairman and chief executive, Richard Brindle, while Fidelis Insurance Group will be led by chief executive, Dan Burrows.
Approvals or non-objections have been received from regulators in the UK, Ireland, Belgium and Bermuda, Fidelis said.
The transaction is expected to be effective as of January 1, 2023.
At completion, Fidelis MGU’s principal equity investors will be Capital Z Partners, The Travelers Companies, Blackstone, Further Global Capital Management and Alfa Insurance.
In addition, Blackstone is leading the debt financing to the MGU, with Oak Hill Advisors and Barings also participating in the debt and providing equity.
The Fidelis Insurance Group capital structure will remain unchanged. Its investors will also remain the same apart from the purchase of a 9.9% stake in the business by Fidelis MGU from existing shareholders.
Brindle and the Fidelis MGU team will have a “significant personal stake” in Fidelis Insurance Group at completion as well as being “significant” shareholders in Fidelis MGU.
“This has been a ground-breaking transaction that will enable the separated entities to focus on what they do best and we are keen to move forward and focus on our clients and brokers,” Brindle said.
Burrows added Fidelis Insurance Group “will benefit from providing long-term capacity to the Fidelis MGU along with mechanisms to ensure alignment between the separated companies”.
