Fidelis Receives Regulatory Nod to Create New MGU, Split Business
Fidelis Insurance Holdings Ltd. announced it has received regulatory approval to create a new managing general underwriter (Fidelis MGU), which is separate from the existing balance sheet insurance companies – known as the Fidelis Insurance Group.
Originally announced and agreed in July, the transaction is expected to be effective on Jan. 1, 2023.
The Fidelis MGU will be led by Chairman and Chief Executive Officer Richard Brindle, while Fidelis Insurance Group will be led by Chief Executive Officer Dan Burrows.
All capital and risk transfer resources currently available to Fidelis brokers and clients will continue to be available, ensuring a seamless transition from the current to new structure, said Fidelis.
The Fidelis MGU’s principal equity investors at completion will be Capital Z Partners, The Travelers Cos. Inc., Blackstone, Further Global Capital Management, and Alfa Insurance.
In addition, Blackstone is leading the debt financing to the Fidelis MGU, with Oak Hill Advisors (OHA) and Barings also participating in the debt and providing equity.
The Fidelis Insurance Group capital structure will remain unchanged, as will its investors apart from the purchase of a 9.9% stake in Fidelis Insurance Group by the Fidelis MGU from existing shareholders, creating additional alignment. Richard Brindle and the Fidelis MGU team will have a significant personal stake in the 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,” commented Brindle.
“Receiving regulatory approval is an important step in this intelligent and innovative transaction. Fidelis Insurance Group will benefit from providing long-term capacity to the Fidelis MGU along with mechanisms to ensure alignment between the separated companies,” according to Burrows.
Fidelis is being 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., and Further Global Capital Management are being advised on the transaction by Skadden, Arps, Slate, Meagher & Flom LLP. Blackstone, OHA and Barings are being advised on the transaction by White & Case LLP and Freshfields LLP.
Approvals or non-objections have been received from the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) in the UK, the Central Bank of Ireland (CBI), the Financial Services and Markets Authority (FSMA) in Belgium, and the Bermuda Monetary Authority (BMA).
About Fidelis Insurance
Fidelis Insurance Holdings Ltd. is a privately owned, Bermuda-based holding company, which, through its subsidiaries, is a global provider of property, bespoke and specialty insurance and reinsurance products. The core operating subsidiaries of Fidelis have financial strength ratings of A (Excellent) by A.M. Best Co. and A- by Standard & Poor’s.
Source: Fidelis Insurance Holdings
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