Kane buying HSBC’s insurance management operations

by Artemis on March 11, 2011

Kane, a provider of risk and insurance management services, has announced in a press release that they are buying HSBC Insurance Management, the worlds fourth largest insurance manager and a leader in the field of insurance-linked securities. The acquisition will create the world’s largest insurance manager with a sizeable interest in the arrangement of catastrophe bonds and management of special purpose vehicles for ILS issuances.

The acquisition is subject to regulatory approval and is expected to complete around the 30th April. The full press release from Kane follows below.

Kane to acquire HSBC’s insurance management operations

Acquisition will create world’s largest independent insurance manager

Kane, a leading provider of specialist risk and insurance management services, has today announced that it has signed an agreement to acquire the insurance management operations of HSBC.

Under the agreement, which has been signed with HSBC Bank Bermuda Ltd, HSBC Bank Cayman Ltd and HSBC Insurance Agency (USA) Inc, Kane will acquire HSBC Insurance Holdings (Bermuda) Ltd, HSBC Insurance SPC Ltd, the insurance management business and assets of HSBC Bank (Cayman) Ltd, and HSBC Insurance Agency (USA) Inc for a total amount of USD27.5m. The acquisition will be backed by private equity firm CBPE Capital.

HSBC Insurance Management (HIM)* is the world’s fourth largest insurance manager and a recognised leader in the field of Insurance Linked Securities (ILS). HIM has an extensive and diverse customer base, which it serves from a global network of offices in Bermuda, Cayman, Guernsey, Malta, New York, South Carolina, Washington DC and Vermont, in addition to being approved to provide insurance management services in six other US States. The Company provides management, administration and structuring support services for: Captives; Cell Companies; Insurance Linked Securities; Insurance and Reinsurance Companies; and Life, Pensions and Investment (LPI) Companies.

Stephen May, CEO of Kane, said: “This agreement is a major step forward in the overall growth strategy for Kane. The acquisition will position us as the world’s largest independent insurance manager and clearly supports our aim of creating a global, domicile-neutral
platform from which to offer our independent, expert advice. We welcome the new employees and customers of HIM into our Group and look forward to building and developing long-term successful relationships.”

HSBC will work closely with Kane to ensure a smooth integration of HIM into the Group. As part of the acquisition, Kane has offered employment to all HIM staff.

Roy Fellowes, CEO of HIM, said: “We are excited about becoming a part of the Kane Group and delighted they have embraced, and are committed to supporting and growing all current HIM business lines. Kane and HIM have a number of synergies, not only in relation to the products and services we provide, but also in terms of the culture and approach of the two organisations. These synergies will enable a successful transition and ensure that we maintain the high levels of service which our customers expect.”

Clive James, a Director of Kane, said: “The acquisition of HIM provides a strong fit for Kane. We have established an excellent reputation in the provision of alternative risk transfer services, and are keen to bolster our activities in all of the sectors in which HIM presently operates. The Company provides a large and secure base in a number of key insurance territories coupled with a significant presence in traditional captives, and the specialist ILS and LPI markets”

Completion of the acquisition is expected to take place on 30 April 2011, subject to regulatory approvals.

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