Reinsurance run-off group, Premia Holdings Ltd., has agreed to acquire Armour Re Ltd., a Bermuda-based P&C legacy reinsurer and a wholly-owned subsidiary of Armour Group Ltd., in an all-share transaction.
Armour Group is an Aquiline Capital Partners LLC portfolio company and in concurrence with the acquisition, an investor group led by Aquiline is making a growth equity investment in Premia.
This equity raise, combined with the formation of its Elevation Re sidecar in December 2020, provides Premia with significant fresh capital to execute on opportunities in the expanding legacy market.
Bill O’Farrell, Chief Executive Officer (CEO) of Premia, commented: “We are delighted to have reached an agreement with Armour and Aquiline. We believe this transaction is a major milestone for Premia to further consolidate its position as a leading legacy P&C reinsurer.
“The Armour acquisition accelerates the build out of our US and European operations. Premia is also excited to be partnering with Aquiline, one of the pre-eminent investors in the insurance sector. We look forward to welcoming the staff and our new shareholder into the Premia family.”
Chris Collins, Managing Director of Kelso & Company, Premia’s majority shareholder, said: “Bill O’Farrell and team have built Premia into a differentiated, industry leading run-off reinsurer since we founded the company with Arch and management in 2017. The Armour transaction is highly strategic in enhancing Premia’s capabilities and providing additional capital to accelerate growth.
“Premia is well-positioned to capitalize on the attractive opportunity in the P&C run-off market, and we are excited to continue to support Bill and the Premia team while welcoming a new shareholder in Aquiline.”
Under the terms of the arrangement, Premia will acquire Armour Re in a two-part transaction. The first part of this sees Armour transfer certain service contracts and staff members to Premia, with Premia later acquiring 100% of Armour Re in exchange for Premia shares.
Jeff Greenberg, Chairman and CEO at Aquiline, added: “We are excited to partner with Bill and the Premia team, who we believe are best-in-class in the P&C legacy market. We are also excited to partner with Kelso and Arch who are well respected insurance industry investors. Our decision to invest in Premia reflects our belief that the P&C legacy sector will continue to be highly attractive.”
TigerRisk Capital Markets & Advisory is acting as exclusive financial advisor to Armour on this transaction. Clifford Chance and DLA Piper are acting as legal advisors to Armour and Premia, respectively.
The news comes just months after Premia revealed that it had reached an agreement to acquire Navigators Holdings (Europe) NV and its associated companies from The Hartford.