Summary
Arch Capital Group Ltd. (ACGL), in partnership with Kelso & Co., has launched Premia Reinsurance Ltd. (Premia Re), a new Bermuda-based multi-line reinsurance company. Premia Re will focus on reinsuring or acquiring companies and portfolios within the non-life property and casualty insurance and reinsurance run-off market. This strategic initiative leverages Arch's expertise in the reinsurance sector to capitalize on opportunities in the run-off market, which often involves managing legacy or discontinued business lines. The launch of Premia Re represents an expansion of Arch's strategic interests and aims to generate value from dormant or underperforming assets within the P&C insurance industry.
Key Highlights
- 1Arch Capital Group (ACGL) co-sponsored the launch of Premia Reinsurance Ltd. (Premia Re), a new Bermuda-based reinsurance company.
- 2Premia Re's primary strategy is to focus on the non-life property and casualty insurance and reinsurance run-off market.
- 3The initial capitalization of Premia Re's parent, Premia Holdings Ltd. (Premia), includes $400 million in common equity and $110 million in unsecured senior debt.
- 4Arch Reinsurance Ltd. (ARL) and co-investors invested $100 million, acquiring approximately 25% of Premia's common equity.
- 5Kelso & Co. and its co-investors invested $300 million, acquiring the remaining equity in Premia.
- 6ARL will provide a 25% whole account quota share reinsurance treaty to Premia Re, indicating a direct business relationship and risk sharing.
- 7ACGL will also provide administrative and support services to Premia Re, generating additional revenue streams.
- 8Key leadership roles at Premia, including CEO and CFO, have been appointed, with the CEO having prior experience at Chubb Ltd.
Frequently Asked Questions
Premia Re's primary business focus is to reinsure or acquire companies and reserve portfolios within the non-life property and casualty insurance and reinsurance run-off market. This means they will manage legacy or discontinued business lines.
ACGL, through its subsidiary Arch Reinsurance Ltd. (ARL) and certain co-investors, invested $100 million for approximately 25% of Premia's common equity. ARL will also provide a 25% whole account quota share reinsurance treaty to Premia Re, and another ACGL subsidiary will offer administrative and support services.
Premia Re's parent company, Premia Holdings Ltd., is initially capitalized with $400 million in common equity and $110 million in unsecured senior debt. Arch and Kelso's investments form part of this common equity.
The main partners are Arch Capital Group Ltd. (ACGL) as a co-sponsor and Kelso & Co. as the other co-sponsor. ACGL's investment vehicle is Arch Reinsurance Ltd. (ARL), and Kelso's investment involves its affiliates and co-investors.