Fidelis will launch a new general underwriter by separating its activities

Fidelis Insurance Holdings Ltd. announced its intention to create a new managing general underwriter who, subject to regulatory approval, will be separated from the existing balance sheet insurance companies, called Fidelis Balance Sheet Companies.

This new structure will allow each entity to focus on its core functions and specialties, and provide customers, brokers and other stakeholders with continued levels of industry-leading service.

The main equity investors in Fidelis MGU will be Capital Z Partners, The Travelers Cos. Inc., Blackstone, Further Global Capital Management and Alfa Insurance. Blackstone will lead the debt financing.

The newly created Fidelis MGU will be one of the largest managing general underwriters in the world, with plans to create and underwrite over $3 billion in gross written premiums across a range of specialty insurance and reinsurance business classes .

Upon separation, the Fidelis MGU is expected to provide a full range of services to Fidelis balance sheet companies, retaining its industry-leading underwriters and attracting additional talent across Fidelis’ businesses.

From a client, broker and reinsurer perspective, it is expected that there will be no change to the way Fidelis currently underwrites from offices in Bermuda, London and Dublin.

Fidelis MGU and Fidelis Balance Sheet Companies will continue to underwrite with the same risk appetite, across Fidelis’ three main business pillars, including bespoke, reinsurance and specialty.

The transaction is expected to bring significant benefits to both businesses, with increased flexibility to respond quickly to changing insurance and reinsurance market conditions and help maintain Fidelis’ market-leading underwriting results through access to top talent.

Pending regulatory approval, companies on Fidelis’ balance sheet should benefit from the provision of long-term capacity for Fidelis’ MGU as well as a number of mechanisms to ensure alignment between companies separated. All capital and risk transfer resources currently available to Fidelis brokers and clients will continue to be available, ensuring a smooth transition from the current structure to the new one.

The Fidelis MGU will be led by Richard Brindle, who will act as President and CEO of the MGU. A number of senior executives from Fidelis’ senior team will be retained by Fidelis’ balance sheet companies.

This transaction and the launch of Fidelis MGU are subject to a number of regulatory approvals and transaction milestones.

“We are delighted to announce this groundbreaking transaction. On-balance sheet companies will have access to our best underwriting talent and risk creation, with appropriate structures in place to ensure alignment,” commented Richard Brindle, Chairman, Group Chief Executive and Chief Underwriting Officer of Fidelis , based in Bermuda.

“I have built my career on underwriting excellence with the support of stable capital providers – from Tarquin in Lancashire and now Fidelis – which will continue through this transaction,” he added.

“Leveraging the best talent in the market, we are creating an MGU platform that will generate attractive returns for shareholders of both separate businesses.”

Fidelis is advised on the transaction by Evercore Partners International LLP, Kinmont, Willkie Farr & Gallagher (UK) LLP and PricewaterhouseCoopers LLP.

Fidelis’ management team is being advised on the transaction by Mishcon de Reya LLP and BDO LLP. Capital Z Partners, The Travelers Cos. Inc. and Further Global Capital Management are advised on the transaction by Skadden, Arps, Slate, Meagher & Flom LLP. Blackstone is being advised on the transaction by White & Case LLP and Freshfields LLP.

Source: Fidelis

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