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Armour acquires top Mexican title insurer

Executives of Bermuda-based Armour Group Holdings Ltd are hoping their investors can benefit from the acquisition of Mexico's largest title insurer.

The acquired company, Fidelity National Title de Mexico, SA de CV, has been renamed Armour Secure Insurance SA de CV, Armour said in statement yesterday.

Title insurance protects investors and lenders against risk in property acquisitions and mortgage finance.

Privately held Armour, a group of insurance, reinsurance, investment management and service companies, did not disclose the terms of the deal.

In its more than eight years of existence, Armour Secure Insurance has written more than $7 billion in policies.

Armour president John Williams said yesterday that the Mexican outfit employs some 15 people and is based in Mexico City.

“It's a high-value, low-volume business,” Mr Williams told The Royal Gazette. “It provides title insurance for large commercial projects and so it is linked to the fast-growing Mexican economy, so it has a great ability to grow.”

He said it was likely the company would expand into other types of insurance and said its licence would permit it to do so.

Chairman and chief executive officer Brad Huntingdon said Armour had been “in the right place at the right time” to make the deal happen.

Armour came to the opportunity to acquire Fidelity National through another of its businesses, Secure Legal Title, which provides title insurance in Europe. It, like the Mexican operation, underwrites using Lloyd's capacity.

“Mexico has been quite a closed market, but the government has made great strides in opening up the market to new operators and competitors,” Mr Huntingdon said. Reforms introduced by President Peña Nieto were indeed partly responsible for enabling the acquisition.

Yves Hayaux-du-Tilly, partner of Nader, Hayaux & Goebel, the lawyers who represented Armour, and chairman of the Mexican Chamber of Commerce in Britain said: “This is the first time that the Mexican Government has authorised a foreign investor from a country that is not a party to a free-trade agreement with Mexico to acquire a Mexican insurance company.

“Bermuda is one of the largest and most highly regarded insurance business jurisdictions globally. We are delighted that it is a Bermuda-based group who are the first to be approved under this new legal framework approved under the reforms to the financial system by the current administration of President Nieto.”

Armour also has acquired Fidelity National Escrow Services, S de RL de CV, now renamed Armour Secure Escrow, S de RL de CV, the first in Mexico to introduce escrow services, which provide an essential element of security in real estate transactions.

Armour Secure Insurance and Escrow will continue under the leadership of Juan Pablo Arroyuelo, director general. Armour Group, founded by former Imagine Group executives Mr Williams and Mr Huntingdon in 2007, is based in the Bermuda Commercial Bank building. It also has offices in London and Philadelphia.

In Bermuda, it employs a team of six people, but chief operating officer Pauline Richards said there were plans to hire two more, probably in the first quarter of next year.

In all, the group employs around 80 people. Several of them are claims experts, heavily involved in the group's substantial run-off segment. Run-off refers to companies or books of business that have stopped writing new business, but still have reserves and obligations to be managed.

Armour seeks value opportunities within distressed, discontinued and other specialty sectors in the insurance and reinsurance industry. Two years ago, Armour announced that an affiliate had acquired the US run-off business of OneBeacon, which came with some $2.2 billion of reserves.

Only last month, Armour Group subsidiary ILS Investment Management, working with Credit Suisse Asset Management, said it had successfully raised $576 million for the first insurance-linked securities (ILS) fund focused on property and casualty run-off portfolios.

Mr Huntingdon said run-off opportunities were widespread in mature insurance markets, in which run-off had become “a tool allowing groups to move their capital around between entities”. He added that Bermuda was home to the world's three largest run-off specialists.

Bermuda had proved to be a good base from which to grow the business, Mr Williams said, as it had a business-friendly environment and “smart regulation”.

Mexico deal: Pictured (from left) are Armour Group chairman and CEO Brad Huntingdon, chief operating officer Pauline Richards and president John Williams (Photo by Akil Simmons)

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Published December 12, 2014 at 8:00 am (Updated December 11, 2014 at 8:28 pm)

Armour acquires top Mexican title insurer

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