Lancashire to buy Lloyd's of London insurer Cathedral
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Lancashire Holdings Ltd. is to acquire Lloyd's of London insurer Cathedral Capital Ltd. from private-equity firm Alchemy Partners and the management of Cathedral for £266 million ($406.6 million).
Lancashire said in a statement that the “transaction represents a rare opportunity to acquire a high-quality Lloyd's business with a short-tail focus, strong business model fit and robust underwriting performance.”
Cathedral underwrites property reinsurance, direct and facultative property business, aviation and satellite, contingency and cargo insurance and reinsurance.
Lancashire, which is headquartered in London but registered in Bermuda, focuses on short-tail lines of insurance, principally aviation, energy, marine and property.
Cathedral is an integrated Lloyd's vehicle, comprising a managing agency and syndicates 2010 and 3010.
For 2013, syndicate 2010 has capacity of £350 million ($535.0 million); 57.8% is owned by Cathedral and the remainder by names — individual investors at Lloyd's.
Cathedral owns 100% of the £30 million ($45.9 million) capacity for syndicate 3010.
For 2102, Cathedral posted a post-tax profit of £11.6 million ($18.9 million) and a combined ratio of 83.4%.
“The deal will broaden our business line exposure, and strengthens and diversifies our core underwriting,” said Richard Brindle, CEO of Lancashire, in the statement.
“This brings two strong underwriting cultures together and gives the enlarged group platforms in London, Lloyd's, Bermuda and in the capital markets,” said John Hamblin, active underwriter of Cathedral's syndicates, in a separate statement. “Cathedral will continue to serve its customers, brokers and names in the same consistent way it has since it was founded in 2001, but with a wider set of options for all of our stakeholders.”
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