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Acquisitions set to elevate Hamilton Insurance

After five years of steady growth, Hamilton Insurance Group Ltd is poised to establish a significantly larger presence on the international insurance and reinsurance stage.

The Bermudian-based holding company has announced the signing of a definitive agreement with Liberty Mutual Group to acquire the Pembroke Managing Agency Limited platform at Lloyd's and Ironshore Europe DAC.

Hamilton is the holding company for property and casualty insurance and reinsurance operations in Bermuda and at Lloyd's. On closing, the transaction is expected to almost double the company's total premium base to more than $1 billion.

Moreover, it will more than double the company's talent pool, while also expanding significantly the company's product lines and geographic reach. Importantly, once the deal closes, the company will have access to the EU with their own platform for the first time.

While merger and acquisition activity in the insurance space can often lead to layoffs, The Royal Gazette understands that the transaction is expected to have no impact on staffing levels in Bermuda, where 75 people are currently employed. Hamilton employs an additional 75 employees in London. Once the deal closes, the company will inherit an additional 180 staff at offices in London, Dublin, Dubai, Shanghai, Los Angeles, Miami and New York.

“It's a transformational deal, and not just because it doubles our premium base,” Pina Albo, chief executive officer of Hamilton, said.

Speaking with The Royal Gazette, she said: “It elevates the profile of the entire company and is tangible proof that we are executing our strategy for growth. Our strategic goal is to become a global, diversified specialty insurance and reinsurance operation fuelled by data science and analytics. This is an incredible step forward on that journey.”

In a statement, the company said the complementary profile of Pembroke and IEDAC's business both accelerates Hamilton's goal of establishing a leadership position in specialty insurance and its ability to expand its reinsurance franchise.

Pembroke was formed in 2004 and underwrites a portfolio of specialty insurance products including financial institutions, global property and professional liability through Syndicate 4000 at Lloyd's.

Hamilton is also purchasing a Lloyd's corporate member from Liberty, specially formed to support the 2019 year of account of Syndicate 4000.

Pembroke also has tenancy rights for Lloyd's Syndicate 2014 (Acappella), Hamilton said, and provides turnkey solutions for Acappella and Lloyd's syndicates 1947 (GIC Re) and 6125 (Patria Re).

Under the terms of the definitive agreement, the company said, Hamilton will be responsible for the 2019 Year of Account for Syndicate 4000 and Liberty will retain the corporate member for prior years.

IEDAC was formed by Ironshore in 2010, in Dublin, and is authorised to write business throughout the EEA and carries licenses to write business as a (re)insurer in a number of other countries worldwide. The company is also listed on the US NAIC International Insurer Directory, allowing it to provide capacity in the United States.

In its statement, Hamilton said IEDAC provides flexibility and strategic optionality for Hamilton particularly with respect to its growth initiatives in Europe and the US.

Ms Albo said: “Given our objective of building a global, diversified specialty insurance and reinsurance organisation, our agreement with Liberty is a meaningful step towards achieving that goal.

“In addition to the opportunities this transaction presents at Lloyd's, in Europe and in the US, we will bring together talented teams who are aligned on culture, underwriting discipline and a commitment to providing superior customer service. The result will be a company well-positioned to respond to our clients' and the market's needs.”

Ms Albo said the fit with Pembroke was particularly good. “Their culture is so similar to ours. When they heard about our technology DNA, they were so much more enthused about joining us. When we alerted the rating agencies of the likelihood of the transaction, one said that Pembroke looked like a transaction designed specifically for us ... the next piece of the puzzle. We all really believe that's the case.”

She told The Royal Gazette: “This is the perfect scenario of having a strategic plan and finding an opportunity that fits squarely in the plan. It checks so many boxes for us. We put a strategic road map together and some plans for organic growth and inorganic growth were in it.

“This growth is inorganic, and it will allow us to build our platform. Looking ahead, I can't say I have a specific end game in mind in terms of premiums but we want to build further organically and by other inorganic opportunities.”

She added: “One of the compelling attractions about this transaction is that there is very little duplication in product lines and in functional areas.”

The transaction is expected to close later this year, subject to the fulfilment of customary closing conditions and obtaining the necessary regulatory approvals.

TigerRisk Capital Markets & Advisory served as financial advisor and Debevoise & Plimpton LLP served as legal advisor to Hamilton.

Acquisition news: Pina Albo, CEO of Hamilton Insurance Group (Photograph supplied)

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Published March 15, 2019 at 9:00 am (Updated March 14, 2019 at 8:50 pm)

Acquisitions set to elevate Hamilton Insurance

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