Nexus Underwriting Managing Limited (Nexus) has acquired U.S. domiciled reinsurance underwriting agency, Zon Re Accident Reinsurance (Zon Re), according to a statement from Nexus backer, B.P. Marsh.
B.P. Marsh holds an 18.6% stake in managing general agent (MGA) Nexus, and provided a £30 million loan facility with HPS Capital Partners, of which a proportion funded the acquisition of Zon Re.
Founded in 2003, Zon Re is led by Chief Underwriting Officer (CUO) and Executive Vice President (EVP) Kieron Farrelly, Vice President (VP) and Senior Underwriter, Chris Holland and Vern Ismen, Senior Vice President (SVP) and Compliance, Claims and Contracts, and provides domestic and global reinsurance capacity for the accident reinsurance sector.
The acquisition is Nexus’ first in the U.S., and enables the firm to add treaty reinsurance to its offerings, and is the third of three recently planned acquisitions by the firm.
B.P. Marsh explains that the takeover will increase Nexus’ financial forecasts for the current year, with gross written premiums increasing to a forecast of £160 million, commission income up to a forecasted £30 million, and EBITDA to a forecast in excess of £11 million.
Commenting on the acquisition, Nexus Chairman, Colin Thompson, said; “Following on from the successful conclusion of Nexus’s capital raising process last week, Zon Re fits the model of profitable, proven, niche MGAs, that we plan to target with our “buy and build” strategy, which will deliver significant EBITDA and value to the Nexus group.
“This is the third acquisition Nexus have exchanged on or completed in the past month, following the purchase of Equinox Global last week and Vectura Underwriting at the end of June. These acquisitions cement Nexus’s position as a multi-product, multi-class, multi-geographic ‘virtual’ insurance company.”
Nexus has increased its gross written premium income from £56 million in 2014 to the expected £160 million in 2017, which represents growth of 185%. Commission income has increased by 143% during this time, while EBITDA has increased by a forecasted 323%.
