RiverStone Group, owned by the Canada-based Fairfax Financial Holdings, has signed an agreement with Brit Group to purchase the FSA-regulated Brit Insurance Limited (BIL) for an undisclosed amount.
The transaction, which is subject to customary regulatory approvals, is expected to be completed in the fourth quarter of 2012.
Until then, Brit Group is committed to maintaining capital levels in BIL equivalent to those held prior to this announcement, which support the rating of A- from A M Best and A from Fitch.
Mark Cloutier, group CEO of BIL, said:
The sale of BIL is a significant milestone in our journey to restructure our capital base and to establish a leading position as a focused global specialty underwriter. We have undertaken a significant reorganisation of the group over the last year, and following the transfer of Brit’s UK regional business to QBE in April; this transaction allows us to focus on growing our core global specialty business through our Lloyd's platform, as Brit Global Specialty.
Furthermore, we are pleased with the outcome of our restructuring efforts whereby through the combination of this transaction and the earlier QBE deal we have realised a meaningful premium to book value for BIL and our UK Division.
RiverStone, a member of the Fairfax group have built a strong franchise and have an excellent reputation for managing the run-off of (re)insurance companies responsibly, so I am confident that this is the right home for the legacy liabilities of the UK business.