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Bermuda’s Fleming Re acquires AggCap II

20th December 2019 - Author: Luke Gallin

Fleming Re Holdings LLC has announced the acquisition of AggCap Insurance Ltd,  – AggCap II, a group captive that is in run-off providing workers compensation coverage for a large membership of California-based agribusinesses.

Fleming ReAggCap Insurance Ltd is a Bermuda-based segregated accounts company that has provided workers comp insurance, loss control services, and active claims management to farms, vineyards, and orchards across California for almost two decades.

The acquisition by Bermuda domiciled Fleming Re provides members of AggCap II with full legal finality, elimination of operating expenses, and a release of capital. Working closely with its TPAs and front companies, Fleming Re will continue to provide the same quality care and coverage, explains the firm.

Chief Executive Officer (CEO) of Fleming Re, Eric Haller, said: “We appreciate the thoughtful dedication of AggCap’s management who, on behalf of its members, worked tirelessly with us to structure a solution that maximized value for all parties. With this acquisition, Fleming Re has this year alone provided a wide range of runoff solutions to the market, including reinsurance, novations, and acquisitions.

“We will continue to build an efficient run-off platform with a focus on quality underwriting of legacy risks. We are seeing growing demand from the marketplace and will complete several more transactions over the coming months.”

An Executive Committee Member and Director of AggCap II, added: “Fleming Re was able to provide the members of AggCap II a fairly priced solution that provided full finality and released excess capital. Their expertise helped facilitate a smooth process.”

While Stephen Minor, Fleming Re Chairman, said: “AggCap constitutes another important transaction for Fleming Re. Even as capital market interest in the runoff asset class grows, we believe our customer universe remains under-served. Trapped collateral, insurtech disruption, rising non-tariff barriers to global capital flows, all create an insurance market that is increasingly fragmented and often illiquid. We are building a legacy carrier that is optimized to address these issues by focusing on the corporate M&A process and the captive/alternative risk transfer universe.

“The track record and cost structure required to do so does not happen overnight nor is it easily replicated. Generating attractive long term returns on capital, we believe, requires patience and specialization. We look forward to deliberate execution on this strategy in 2020.”

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