Log In

Reset Password
BERMUDA | RSS PODCAST

Flagstone to sell Lloyd’s unit for $48m

For the second time in successive days, Flagstone Reinsurance Holdings announced the sale of an operating asset.

Yesterday the company said it would sell its Lloyd’s operations to Netherlands-based specialty insurance business ANV Holdings BV for about $48 million in cash.

Luxembourg-based Flagstone will also release about $162 million in underwriting capital that is currently supporting the unit’s operations.

The announcement came the day after Flagstone announced that it had agreed to sell its 60 percent interest in Cayman-based insurer Island Heritage to Bermuda insurer BF&M Ltd for $40.8 million.

Flagstone’s Lloyd’s segment includes the business generated for Lloyd’s Syndicate 1861 by Marlborough Underwriting Agency, which was acquired by Flagstone from Berkshire Hathaway in 2008.

In October, Flagstone announced plans to sell its Lloyd’s and Island Heritage units to focus on its property and property catastrophe businesses.

Last year, Flagstone was heavily impacted by catastrophe losses and posted a net loss of $326 million for 2011.

“The divestiture will enhance our focus on our core businesses and, along with other strategic actions already underway, will create additional capital to pursue our business,” David Brown, Flagstone’s chief executive said in a statement.

Flagstone was formed in Bermuda in 2005 to meet the need for new reinsurance capacity after Hurricane Katrina. The company continues to have underwriting operations on the Island.

On completion of the transaction, Ontario Teachers’ Pension Plan will become the lead investor in ANV as part of a $250 million refinancing.

Evercore Partners is acting as financial adviser to Flagstone in connection with the transaction which is expected to be completed before the end of the second quarter of 2012.

Flagstone’s shares, which have lost about 14 percent of their value since the company reported fourth-quarter results in February, closed at $7.89 on Monday on the New York Stock Exchange.

Flagstone CEO David Brown

You must be Registered or to post comment or to vote.

Published April 04, 2012 at 9:31 am (Updated April 04, 2012 at 9:31 am)

Flagstone to sell Lloyd’s unit for $48m

What you
Need to
Know
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon