Dellwood founders sued by AIG
Two former AIG executives with Bermuda connections who formed a new E&S re/insurer with support from a number of Bermuda-based re/insurers are being sued by their former employer for allegedly breaching non-compete agreements they signed on leaving the company.
Former Validus CEO Kean Driscoll and former Arch chief underwriting officer Michael Price are being sued by AIG along with a third former AIG employee, Thomas Connolly, after they announced the formation of Dellwood Insurance Group and said they had raised $250 million in capital for the company, which is registered in Delaware and operates from New Jersey.
All three worked at AIG prior to the establishment of Dellwood.
Price, who joined AIG after Arch and was CEO for North America general insurance until last June, serves as chief executive officer for Dellwood. Driscoll, who also joined AIG after Validus, and served as global chief underwriting officer (CUO), is president and CUO of the new group. Connolly is said to to be the chief financial officer, according to the lawsuit. He was CFO of AIG's North America General Insurance and left the company on March 15 this year.
AIG said its E&S division had experienced "explosive growth" since 2018, adding: "This was not a random happenstance but rather a direct result of AIG’s intellectual labour
and significant investments."
The company said Price, who had been CEO of North America General Insurance, and Driscoll, who served as AIG’s Global CUO of General Insurance, were both involved in E&S and resigned last year.
It claimed Price was subject to post-employment contractual obligations prohibiting him from competing with AIG (through September 30, 2023), interfering with AIG’s customer relationships (through September 30, 2023), soliciting AIG’s employees (through June 30, 2024), soliciting AIG’s customers where doing so would require use or
disclosure of AIG’s Confidential Information (does not expire), disclosing AIG’s Confidential Information (does not expire), and disparaging AIG (does not expire).
Driscoll was placed on garden leave through March 3, 2024 and was prohibited from competing with AIG or violating his fiduciary duty of loyalty through March 3, 2024, soliciting AIG’s employees (through March 3, 2024), soliciting AIG’s customers where doing so would require use or disclosure of AIG’s Confidential Information (does not expire), disclosing AIG’s Confidential Information (does not expire), and disparaging AIG (does not expire).
The lawsuit alleged: "On March 7, 2024, only four days after Driscoll’s garden leave and noncompete expired, Price and Driscoll publicly announced the formation of Dellwood as a competitor to AIG in the field of E&S insurance.
"On information and belief, Price and Driscoll breached their obligations to AIG long before their non-competes expired. Indeed, Dellwood’s own publicly filed documents reveal that the Dellwood legal entity was formed in Delaware no later than December 28, 2023, and registered to do business in New Jersey no later than January 30, 2024.
"Moreover, by March 7, 2024, Price and Driscoll had already raised more than $250 million in seed capital from various investors."
It added: On information and belief, Price and Driscoll raised $250 million in capital by actively marketing Dellwood to these insurance investors, and thereby competing
against AIG, at a time when one or both of them was contractually obligated not to do so.
By March 7, 2024, Price and Driscoll had also already engaged Howden Tiger Capital Markets & Advisory as Dellwood’s financial advisor and engaged Foley & Lardner as Dellwood’s legal advisor.
"In addition, by March 7, 2024, Price and Driscoll had hired multiple former AIG employees who worked with them in AIG’s E&S group. AIG has reason to believe that Price, Driscoll, and Dellwood are not simply looking for competent employees from AIG to join them at Dellwood, but rather are seeking out the AIG Confidential Information that their former colleagues possess."
The lawsuit claimed that Price and Driscoll actively recruited Connolly in violation of their agreements while he was still at AIG, adding: "Worse, Price and Driscoll convinced Connolly to work for Dellwood as a secret agent during at least his final month at AIG, which concluded March 15, 2024."
It added: "AIG has discovered documentary evidence that Connolly — while still employed by AIG — performed work for Dellwood, forwarded AIG’s confidential information to his personal email address for use at Dellwood, and solicited AIG coworkers to join him at Dellwood."
When the formation of the company was announced, Dellwood said it would focus on wholesale brokers and emphasise small and middle enterprise (SME) risks.
Its backers included Bermuda’s RenaissanceRe and PartnerRe, as well as Starr Insurance, Central Insurance, and individual investors, including Dominic Addesso, David Delaney, VJ Dowling, Jim Hays, and principals from Stone Point Capital.
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