Some real money is starting to change hands in insurance as 2019
comes to a close.

While reporting on insurtechs gathering millions in funding is the norm,
some traditional firms are splashing the cash on stakes in others.

The Carlyle Group and T&D have reached an agreement to purchase a 76.6% stake in Fortitude Re from AIG for $1.8bn.

The acquisition will be carried out by a newly established Carlyle-managed fund.

Post-deal, Carlyle will hold a 71.5% stake in Fortitude Re (including the 19.9% stake it took at launch in November last year), while T&D and AIG will own a 25% and 3.5% stake, respectively.

Carlyle said that the acquisition will enable it to support Fortitude Re’s growth plans, and offer the reinsurer access to its various investment strategies.

Additionally, T&D will help Fortitude Re to develop its strategically differentiated capabilities. With the support of Carlyle, T&D and AIG, Fortitude Re will work to acquire and manage legacy insurance portfolios.

Pursuant to the terms of the agreement, AIG will pay Fortitude Re up to a maximum payment of $500m for certain adverse developments in property casualty related reserves which may take place up to the end of 2023.

Some real money is starting to change hands in
insurance as 2019 comes to a close.

While reporting on insurtechs gathering millions in
funding is the norm, some traditional firms are splashing
the cash on stakes in others.

The Carlyle Group and T&D have reached an agreement to purchase a 76.6% stake in Fortitude Re from AIG for $1.8bn.

The acquisition will be carried out by a newly established Carlyle-managed fund.

Post-deal, Carlyle will hold a 71.5% stake in Fortitude Re (including the 19.9% stake it took at launch in November last year), while T&D and AIG will own a 25% and 3.5% stake, respectively.

Carlyle said that the acquisition will enable it to support Fortitude Re’s growth plans, and offer the reinsurer access to its various investment strategies.

Additionally, T&D will help Fortitude Re to develop its strategically differentiated capabilities. With the support of Carlyle, T&D and AIG, Fortitude Re will work to acquire and manage legacy insurance portfolios.

Pursuant to the terms of the agreement, AIG will pay Fortitude Re up to a maximum payment of $500m for certain adverse developments in property casualty related reserves which may take place up to the end of 2023.

Some real money is
starting to change
hands in insurance
as 2019 comes to a close.

While reporting on insurtechs gathering millions in funding is the norm,
some traditional firms are splashing the cash on stakes in others.

The Carlyle Group and T&D have reached an agreement to purchase a 76.6% stake in Fortitude Re from AIG for $1.8bn.

The acquisition will be carried out by a newly established Carlyle-managed fund.

Post-deal, Carlyle will hold a 71.5% stake in Fortitude Re (including the 19.9% stake it took at launch in November last year), while T&D and AIG will own a 25% and 3.5% stake, respectively.

Carlyle said that the acquisition will enable it to support Fortitude Re’s growth plans, and offer the reinsurer access to its various investment strategies.

Additionally, T&D will help Fortitude Re to develop its strategically differentiated capabilities. With the support of Carlyle, T&D and AIG, Fortitude Re will work to acquire and manage legacy insurance portfolios.

Pursuant to the terms of the agreement, AIG will pay Fortitude Re up to a maximum payment of $500m for certain adverse developments in property casualty related reserves which may take place up to the end of 2023.

In addition, Chubb has reached an agreement to purchase an additional 15.3% stake in China-based Huatai Insurance Group.

The deal is valued is valued at approximately CNY10.8bn ($1.53bn), according to Reuters.

With the completion of the proposed takeover, Chubb holding in Chinese insurer will increase to 46.2%.

The latest announcement follows the regulatory approval by China Banking and Insurance Regulatory Commission (CBIRC) of other deal that increase Chubb stake to 30.9%.

In March, Chubb secured permission from the CBIRC to increase its ownership in Huatai Insurance Group Company to 26.2% from 20%.

As per the terms of the agreement, Chubb will acquire the shares from the Inner Mongolia Junzheng Energy and Chemical Group and one of its wholly owned subsidiaries.

Additionally, the parties have agreed for an additional 7.1% stake purchase in Huatai Insurance following the completion of the first deal.

This will not be the end. With the flurry of insurtechs entering the market, consolidation will not be far away. Firms such as Lemonade are likely to have enough backing to remain independent, but others may be tempted. These deals prove that there is money to be spent, but at the moment, it is a safer bet to take a stake in something that works.

As soon as insurtechs prove that they are a success, the bids will come flying in.

Patrick Brusnahan, Editor
Patrick.brusnahan@verdict.co.uk