Montpelier Re agrees to sell US unit for $55m
Bermuda re/insurer Montpelier Re Holdings Ltd has agreed to sell its US excess and surplus lines business to Selective Insurance Group in a deal worth $55 million.
The sale of Montpelier US Insurance Company (MUSIC) will allow the company to allocate more capital to the underwriting of short-tail reinsurance lines, Montpelier’s chief executive officer Christopher Harris said yesterday.
The deal is expected to add 24 cents per share to Montpelier’s book value per share, according to a company statement.
In the 12 months through June 30 this year, MUSIC accounted for eight percent of Montpelier’s net premium written, the company revealed in an investor update document.
“In the current environment, we believe now is an appropriate time to sharpen our underwriting focus on our core short-tail reinsurance lines,” Mr Harris said.
“This transaction will make us more nimble and will allow us to redeploy additional capital into our Bermuda and London platforms, where we are seeing increasingly encouraging market conditions.”
The deal, which is subject to regulatory approvals, is expected to close before the end of the year.