American Financial Group, Inc. (AFG) is set to complete its previously announced exit from the Lloyd’s of London re/insurance marketplace via the sale of GAI Holding Bermuda and its subsidiaries, which comprises the legal entities that own its Neon business, to RiverStone Holdings Limited.
AFG announced at the start of the year that it is pulling out of underwriting in the Lloyd’s marketplace, with its Neon business there set to go into run-off.
The firm has now announced that it has reached a definitive agreement to sell Neon to RiverStone UK, a leader in the legacy insurance space.
Upon closing, AFG expects the release of all of its funds at Lloyd’s (FAL) including release of the letters of credit and collateral pledge facility that AFG guarantees in support of Neon’s FAL.
The deal is expected to close in the fourth-quarter of 2020, subject to customary conditions, including receipt of required regulatory approvals. Furthermore, in accordance with generally accepted accounting principles, it is expected that AFG will record the sale in Q3, with the sale not expected to have a material impact on the firm’s outgoing results of operation.
Carl H. Lindner III, AFG’s Co-Chief Executive Officer (CEO), said: “The sale of Neon finalizes AFG’s exit from the Lloyd’s market, following AFG’s decision to place this business into run-off effective in the fourth quarter of 2019. The exit allows us to provide continued focus on our other Specialty P&C businesses and enables us to redeploy capital, increase earnings and returns, and create long-term value for our shareholders.”
Luke Tanzer, RiverStone’s UK Managing Director, added: “We are delighted that AFG has selected RiverStone as their partner for this transaction. We have worked closely and collaboratively with AFG to ensure that their strategic objectives are achieved through this transaction, and we will ensure that Neon insureds continue to receive the highest possible level of service.”
