Lancashire Re has entered into a conditional agreement to acquire privately owned Lloyd’s insurer Cathedral Capital for £266million. Cathedral is a specialty re/insurance provider operating exclusively in the Lloyd’s insurance market writing property, aviation, satellite, marine cargo and contingency classes. The deal is expected to be both book value and earnings accretive in the first year.
According to Lancashire’s Board of Directors, the companies write complementary business and the transaction represents a rare opportunity to acquire a high-quality Lloyd’s business with a short-tail focus, strong business model fit and robust underwriting performance. In addition, the Lancashire Board believes that the acquisition of Cathedral will provide Lancashire with the flexibility to respond to the changing industry and market environment, which increasingly requires multiple distribution capability.
The Board writes: “Lancashire remains committed to its core strategic objectives. Cathedral is an underwriter-led and highly streamlined business with a track-record of excellence that is well aligned to Lancashire’s strategic priority of ‘underwriting comes first’ and nimble underwriting approach. The acquisition provides Lancashire with scale in existing lines of business and opportunities for further organic growth.”
Lancashire Re, Lloyd's, acquisition