Bermuda run-off sector expands with $500m start-up Premia

10-01-2017

The run-off market on Bermuda has been boosted by the creation of Premia Holdings, the largest ever start-up re/insurer dedicated to run-off, with more than $500 million in capital in an indication of the growing importance and anticipated growth of the legacy market globally.

Premia, a Class 4 property/casualty reinsurer focused on providing run-off solutions, has raised $510 million from founding investors including Kelso & Company, a private equity firm, its co-investors, and an affiliate of re/insurer Arch Capital Group.

Arch will also serve as a key strategic reinsurance partner, allowing Premia to compete on the largest global run-off transactions, the company said. The remainder of the capital comes from other institutional investors, the Premia management team and senior members of Arch.

The new company was founded and will be led by reinsurance industry veteran Bill O’Farrell, the former chief reinsurance officer at Chubb (formerly ACE) who will serve as chief executive officer.

Premia’s leadership team will also include Scott Maries as chief financial officer and Joe Calandro as executive vice president, along with additional talented team members within its operating units.

The company has said it will seek to insure, reinsure or acquire run-off portfolios and companies around the globe. A combination of new regulatory regimes including Solvency II and competitive market conditions have forced more companies than ever to seek more capital efficient solutions for legacy business.

“We are very excited to introduce a new, strongly capitalised reinsurance group focused on P&C runoff,” said O’Farrell. “I have been gratified by the number of inbound calls I have already received from companies, both large and small, and their advisors, seeking runoff solutions from Premia.

“This has only validated my strongly held position that the P&C runoff market is in need of a specialist solutions provider as clients seek to address the inefficient capital drag arising from their run-off operations, free up management time to focus on their core live business, and diversify their legacy exposures away from the concentrated handful of runoff companies that have shaped the market to date.”

Chris Collins, managing director of Kelso, added: “We believe we are entering this market at the right time with the right management team and with a differentiating partner in Arch. We are confident Premia will be a leading participant in the runoff market.”

Marc Grandisson, president and COO of Arch, said: “We are very pleased to help launch Premia. We believe that Premia, with its strong management team, will be well positioned to provide innovative solutions and structures not available in the P&C runoff market today.”

Bermuda, Premia, Arch Capital Group, Kelso & Company, Marc Grandisson, Insurance, Reinsurance, Run-off, Bermuda, Appointment, Bill O’Farrell

Bermuda Re