Ariel Re’s private equity buyout from Argo completes

The previously announced acquisition of Ariel Re by private equity investors from its owner Argo Group has now been completed, putting the reinsurance company back on a private footing as a pure-play reinsurance underwriter and manager of third-party capital.

Ariel Re will continue to have a focus on both traditional and alternative sources of capital, as well as a property catastrophe leaning, with Ryan Mather, Ariel Re’s former CEO, returning to run the business.

Investor Pelican Ventures, an investment company launched by the RenaissanceRe founder Jim Stannard alongside catastrophe modeling pioneer Jayant Khadilkar and others, alongside private equity buyout giant J.C. Flowers & Co. announced yesterday evening that the acquisition has already been completed.

Also announcing the finalisation of an operational partnership with Apollo Syndicate Management Limited to develop its Lloyd’s special purpose arrangement SPA 6133.

SPA 6133 at Lloyd’s will have a focus on property catastrophe reinsurance, while Pelican Ventures and J.C. Flowers will provide it with additional underwriting capital and Ariel Re will provide operational support and distribution to it.

“Ariel Re has a world class team of people, a well-established book of business, a great platform and we want to expand on that,” explained CEO Mather. “Although you may be familiar with the name, this won’t be the same Ariel Re of the past. The new Ariel is excited to become a bigger, bolder player in the industry and is eager to work with both old and new clients to help fulfill our vision of making Ariel Re the premier manager of reinsurance risk.”

Mather also explained that the linking of Ariel Re with Apollo SPA 6133 will help it to achieve greater scale and enable the reinsurance company to “create more meaningful relationships with its clients going forward.”

“The Ariel Re team, under the leadership of Ryan Mather, will implement our strategy for building a world-class manager of reinsurance risk,” added Jim Stanard of investor Pelican Ventures. “Together, Ariel Re and SPA 6133 will bring significant fresh capital into the marketplace and enable us to act quickly.”

Eric Rahe, Managing Director of PE firm J.C. Flowers, also said, “We look forward to partnering with the Ariel Re team, building on their outstanding track record and taking advantage of the exciting opportunities in the P&C market today.”

Ariel Re has leveraged the capital markets within its underwriting for some years now, both through private quota share or sidecar arrangements and other structures.

The company has ambitions to enable third-party capital providers to benefit from its expertise and access to risk going forwards.

Argo said today that it has received $30 million for the sale of Ariel Re, but that is only for the go-forward operations of the 2021 portfolio, with all the legacy risks remaining Argo’s responsibility for all years 2020 and prior.

“This is an important milestone for Argo Group as we simplify our operations – primarily as a U.S.-focused specialty insurer,” Argo Chief Executive Officer Kevin J. Rehnberg commented. “We are pleased to complete this transaction and appreciate the time and attention provided by Pelican Ventures and J.C. Flowers & Co., as well as the collaboration with our regulators.”