SiriusPoint has become a strategic investor in Mosaic Insurance as the company looks to “reinvigorate” its business at Lloyd’s, through an arrangement that includes the sale of its Lloyd’s Managing Agency, Sirius International Managing Agency (SIMA), to Mosaic.
Mosaic will acquire SIMA along with its employees as part of a larger strategic partnership with SiriusPoint, with an eye to modernising the unit over time into a digitalized managing agency.
The business will continue to support Syndicate 1945 at Lloyd’s, which will remain 100% owned by SiriusPoint.
Under the terms of their partnership, SiriusPoint says it will invest in Mosaic to support growth, provide underwriting capacity to Mosaic’s syndicated capital program and provide access to global licenses and infrastructure through a fronting arrangement.
Additionally, Sid Sankaran, Chairman and Chief Executive Officer of SiriusPoint, will take a seat on Mosaic’s Board.
“Reinvigorating our Lloyd’s business is a key element of our strategy,” said Sankaran. “Syndicate 1945 is an important part of our global platform providing us and our strategic partners with access to the licenses and ratings that Lloyd’s offers. Partnering with Mosaic, which is a fantastic, entrepreneurial company, sets us on a path to access the right talent, scale our business, and achieve profitable growth.”
“We’re excited about this opportunity to expand our presence at Lloyd’s and we’re proud of the phenomenal partnership that brings mutual benefit to both our companies,” added Mosaic Co-CEO Mitch Blaser. “For Mosaic, this agreement provides scale and value, and accelerates our strategic ambition—having a managing agency as part of our platform was always the vision.”
Mosaic Co-CEO Mark Wheeler also commented: “Mosaic’s business model is built on the foundation of valuable partnerships—and this agreement embodies that philosophy. We value SiriusPoint as a new shareholder, together with the visionary industry view of Sid Sankaran, and we look forward to working closely with him and his team.”
It is unclear as to how this latest transaction fits within SiriusPoint’s plans for this year. Recently, Sankaran said that the company had made ‘significant progress’ in 2021 in positioning itself for the future. Headquartered in Bermuda, SiriusPoint launched in February 2021 as one of the first fully formed re/insurers of the Class of 2020, following the merger of Third Point Reinsurance Ltd. and Sirius International Insurance Group, Ltd.
The company fell to a net loss of $140m in Q4 2021 but reported income of $45m for the full year, as catastrophe losses dented the company’s underwriting performance.
“We are delighted to be partnering with Mosaic, which is a fantastic, entrepreneurial company led by an experienced team,” Sankaran continued. “Mosaic has the potential to disrupt the traditional way of doing things and drive change in the market. It is a terrific fit for SiriusPoint’s portfolio of disruptive and technology-driven insurance businesses and as a visionary parent company for our highly-regarded and capable managing agency team.”
Meanwhile, Mosaic has been looking to activate more capacity in recent weeks in order to meet its transactional liability risks. A recent story here reported that the specialty insurer will underwrite transactional risks for several new trade-capital partners, among them, HDI Global Specialty, Verto Syndicate 2689, and IQUW Syndicate 1856.
That partnership looked to drive Mosaic capacity in the sector from $25m to $41m in North America, and to $36m through the rest of the world.
“We are pleased to welcome SiriusPoint as a shareholder through this innovative transaction,” said Dan Haspel, a Mosaic Board member and Managing Director at Golden Gate Capital, the San Francisco-based private equity investment firm that is Mosaic’s anchor investor. “We look forward to building a long-term partnership with SiriusPoint as we create value for both sets of stakeholders.”
“We look forward to welcoming employees from the managing agency to our Mosaic family,” Chief of Staff Lisa Fontanetta further remarked. “They will all play a critical role in the agency’s growth and development, and we see expanded opportunities for these individuals as part of the wider Mosaic group in future.”
Completion of the agreement, subject to approvals, is expected to take place in the second half of 2022.
SiriusPoint was assisted in this latest transaction by law firms Herbert Smith Freehills and, in respect of employment matters, Norton Rose Fulbright.
Mosaic, meanwhile, was assisted by law firms RPC, London; Kirkland & Ellis LLP, New York; and Paul, Weiss, Rifkind, Wharton & Garrison LLP, San Francisco.