The acquisition of specialist Bermuda-headquartered insurance and reinsurance firm Endurance Specialty Holdings Ltd. by Japanese insurance giant Sompo Holdings is not expected to result in any changes to the management of collateralized reinsurance and ILS specialist Blue Capital Re.
Blue Capital Reinsurance Holdings Ltd., the New York Stock Exchange (NYSE) listed provider of fully collateralized reinsurance in the property catastrophe market, is just one of the reinsurance linked investment vehicles operated by Blue Capital Management Ltd., the ILS investment management unit of Endurance.
After the announcement yesterday of the acquisition of Endurance by Sompo Japan, Blue Capital Management said that it does not anticipate any changes to the way Blue Capital Re is run and this will likely be the same for the other Blue Capital ILS investment vehicles such as its London-listed Blue Capital Global Reinsurance Fund Limited.
“The Company does not anticipate any changes in the management of Blue Capital and all members of the Endurance Executive Team have agreed to continue in their current roles following the acquisition for at least five years,” Blue Capital explained.
In fact, the acquisition will likely be very good for Blue Capital and its investors, increasing the reach of its collateralized reinsurance products, opening new geographies to the firm and its funds and providing enhanced access to potential new cedents through parent Sompo.
Investors will be pleased to hear its business as usual and may be intrigued by the potential synergies between Blue Capital and Sompo, which could help to raise interest in the managers investment offerings.
For Sompo too there are synergies and benefits. Sompo Canopius in London had been exploring establishing its own ILS unit for some months, but with Blue Capital now set to be part of the family it will have acquired an active insurance-linked investment unit with a strong track record.