Argo Group has reached an agreement with Pelican Ventures and J.C. Flowers & Co that will see the two private equity investors acquire property and casualty reinsurance underwriter Ariel Re for an undisclosed sum.
Terms for an operational partnership with Apollo Syndicate Management have been also agreed upon.
The partnership will be aimed at further developing SPA 6133, a Lloyd’s special purpose arrangement focused on P&C reinsurance.
As per the agreement, Pelican Ventures and J.C. Flowers will provide additional capital, operational support and distribution.
Meanwhile, Ariel Re’s former Chief Executive Officer Ryan Mather will be returning to run the business and oversee underwriting for both syndicates.
“Our vision is to make Ariel Re the premier manager of reinsurance risk,” said Mather.
“Our ability to act independently will enable us to provide greater value to customers, bring fresh capital to the marketplace and enable third-party capital providers to benefit from our team’s industry expertise.
“Pairing Ariel Re with SPA 6133 will create significant growth and economies of scale for our franchise, allowing us to be more efficient for our capital providers and effective to our clients.
“We will continue to work closely with our clients and business partners to offer solutions in these challenging markets.”
Commenting on the acquisition agreement CEO Kevin Rehnberg noted how Ariel Re is well known in the reinsurance market, and that Argo is confident the business will thrive as part of Pelican Ventures.
“Argo Group will continue to focus on specialty insurance lines of business that we expect will result in profitable growth and improved shareholder value,” Rehnberg said. “This transaction aligns with our strategy to simplify the business and streamline operations.”
The Pelican Ventures team includes RenaissanceRe founder and former TigerRisk Partners chairman and co-founder Jim Stanard, as well as catastrophe modelling specialist Jayant Khadilkar.
Stanard will become Ariel’s non-executive cchairman while Khadilkar will act as a special advisor focusing on modeling, analytics and technology.
“Pelican Ventures is excited to be investing in Ariel Re and SPA 6133 and bringing together talented professionals with unparalleled reinsurance market underwriting expertise and risk management analysis skills,” Stanard added.
“With the financial strength and insights of our new ownership group and under the leadership of Ryan Mather, we will pursue our ambition of building a world-class manager of reinsurance risk.”
Eric Rahe, Managing Director of J.C. Flowers, noted “We look forward to partnering with Jim, Ryan, Jayant and the rest of the Ariel Re team to continue to build on its outstanding track record and take advantage of the exciting opportunities in the P&C market today.”