New insurance firm launches with $1.5bn
A new insurance and reinsurance firm has set up with a massive $1.5 billion in equity — one of the largest capital raises on record.
Fidelis Insurance has opened its doors after a cash injection from three private equity firms — Crestview Partners, CVC Capital Partners and Pine Brook worth $650 million.
Fidelis founders and leaders are industry veterans Richard Brindle, who is group CEO and chief underwriting officer, and Neil McConachie, group chief financial officer.
Mr Brindle said: “We are very excited to introduce a new, stronger model to the insurance industry with Fidelis.
“By focusing on either assets or liabilities, legacy insurance models have failed to optimise have failed to optimise shareholder returns and the low returns generated by fixed income investments have been challenging.
“Fidelis will pursue a total return strategy by tactically shifting capital and risk between insurance and investments to maximise our return on equity across market cycles.”
And Mr Brindle added: “But we are first and foremost an underwriting company. We have a vastly experienced management team that is strongly supportive of the traditional broker distribution network and has, over decades, developed many stronger broker and client relationships.
“These relationships will sit at the heart of everything we do at Fidelis.”
The firm will — instead of exclusive investment manager mandates to their hedge fund owners — allocate capital to top-tier managers running more diverse strategies that are suited to different parts of its book and will have the ability to change managers and allocations.
Mr McConachie said: “In addition to seeking returns that outperform peers, we believe the diversification in assets will protect Fidelis against financial market volatility better than a single strategy market would.
“Optimising across hard and soft underwriting markets, as well as through different investment cycles, makes Fidelis not only a strong new player but also very attractive for investors looking to downsize risk.”
The firm underwrites insurance and reinsurance business, mostly in the property, energy, marine and aviation sectors.
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