Fundamental Global Inc., the company that is being formed out of the merging of FG Financial Group, Inc. and FG Group Holdings Inc., expects to accelerate and grow its reinsurance business, FG Reinsurance (FG Re).
This is according to Kyle Cerminara, CEO of the new Fundamental Global company, and Tom Heise, the CEO of FG Reinsurance, Ltd.
As we reported recently on the announcement of the merger, the combined entity will have assets totalling over $110 million and an annual revenue surpassing $65 million, while expense savings are projected to exceed $3 million in the first year post-merger, with additional savings targeted in the subsequent 12-24 months.
FG Reinsurance Ltd. (FG Re) is a Cayman Island Class B (iii) Insurer that underwrites opportunistic collateralized and loss capped reinsurance opportunities, participating in the global reinsurance market through the Funds at Lloyd’s approach, writing traditional reinsurance contracts and also industry-loss warranties (ILW’s).
Post-merger, time and resources are set to be focused on growing the FG Re reinsurance business and Cerminara and Heise explained to Reinsurance News that they see the timing as opportune.
Cerminara said, “By combining our two companies, we can accelerate FG Re’s strategy to match our capital to desirable risk in a hard reinsurance market.”
Heise further explained, “I am very pleased that our parent company decided to do this transaction. It immediately increases our capacity, allowing us to participate more in this terrific reinsurance market, and brings additional scale to our business.”
The increased capacity comes at a positive time, with reinsurance rates having remained at highs and capacity still more limited in certain segments of the market.
All of which means underwriting opportunities are still very profitable, dependent on loss activity of course, but that there are also opportunities to provide solutions that can be a source of margin and growth for a reinsurer like FG Re.
Cerminara also told us, “This transaction also positively impacts each of our three drivers of profit – underwriting, fee, and investment income. We believe this transaction will create both immediate and long-term value for our shareholders.”
