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The inflow of new capital drives a rapid pace in the M&A business



The merger and acquisition activity will continue in the surplus and surplus sector, while new capital will continue to enter the market.

Among the most recent deals, Cincinnati-based Core Specialty Insurance Holdings Inc. said in April that it merged with Long Beach, New York-based Lancer Financial Group Inc. in a stock and cash transaction, resulting in a Core Specialty after the merger with more than $ 1 billion in equity.

In July, the New York-based Amynta Group announced that it had acquired Scion Underwriting Services, a managing general firm that provides special liability insurance to the E&S market, from London-based Brit Ltd.

In August, Dual Group, the drawing arm of London-based brokerage firm Howden Group Holdings Ltd. agreed to acquire $ 800 million in Align Financial Holdings, a $ 800 million San Diego-based general agency and management team.

“There are still a lot of M&A activities on the wholesale brokerage side, and there are certainly markets that want to continue to acquire on the agency's side. I see no real end in sight for that, ”said Eric Blecker, Hartford, Connecticut-based president of Northfield Excess & Surplus Lines, a unit for travelers Cos. Inc.

In November, Core Specialty said it had recapitalized StarStone US Holdings Inc. with $ 61

0 million in new equity from investors. It operates through StarStone Specialty Insurance Co., an American line and surplus line insurance company, and StarStone National Insurance Co., a recognized insurer.

"We thought that the (E&S) market really required additional capacity" on the "heels" of a couple of years of market disruption ", says Jeff Consolino, Core Specialty's President and CEO.

Among other capital infusions, Convex Group Ltd., a specialist insurer and reinsurance company in London and Bermuda 2019, raised an additional $ 500 million in capital in January from an investment firm.

Dallas-based Upland Capital Group Inc. launched early this year and said that with $ 200 million in financing, it would offer a portfolio of surplus and surplus lines, accidents, real estate and specialty insurance products, with an initial focus on surplus products being distributed via wholesale brokers.

In June, San Francisco-based Pathpoint, a digital surplus and surplus, said it had raised $ 30 billion in funding, the third round of funding since it was founded in 2020.

The new business entering the sector will "not in large chunks," but slowly and "with a more intelligent thought process" than in the past, said Cliff Hope, Atlanta-based real estate manager at Lexington Insurance Co., a unit of American International Group Inc.

David Bresnahan, vice The vice president of Berkshire Hathaway Specialty Insurance Co. in Boston, however, said that while "new businesses and operators are definitely emerging", they tend to focus on certain market segments and are unlikely to have a broad risk appetite affecting the overall sector.

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