Core Specialty has now launched after the private equity capitalisation and rebranding of Enstar’s StarStone U.S. operations, with Jeff Consolino and Ed Noonan at the helm, while industry veterans Dominic Addesso and Don Larson have also been added to the board.
As we explained back in June, Enstar was set to push back into U.S. property and casualty markets, with a focus on excess and surplus lines (E&S) business, thanks to a successful $610 million recapitalisation of Starstone U.S. from private equity giants including Dragoneer, SkyKnight and Aquiline.
In total the newly rebranded Core Specialty will have $900 million of capital, thanks to this private equity raise, Enstar’s rolled-over ownership and a $60 million injection from management and other investors.
SkyKnight and Dragoneer will each own around 27%, Enstar 25%, Aquiline 11%, management and Directors 6% and other investors 4%.
Giving certainty to go-forwards, one of Enstar’s entities has entered into a combination loss portfolio and adverse development cover reinsurance agreement on the book inherited from StarStone U.S.
Former owner Enstar Group Limited has received a combination of cash and shares in Core Specialty as part of the recapitalisation, enabling it to continue having a foothold in the important U.S. E&S marketplace, but now through a well-capitalised entity with a stellar management and executive team.
The company had already revealed the hiring of former Validus founding member Jeff Consolino to be the new President and CEO of Core Specialty, while former Validus CEO will become Executive Chairman of the company.
The Board of Core Specialty is a cast of insurance and reinsurance market luminaries and key investors, including Noonan and Consolino; Paul O’Shea and Robert Campbell from Enstar; Steve DeCarlo (of AmWINS fame); Dominic Addesso (the former CEO of Everest Re); Don Larson (the former President and COO of Great American Insurance); Matthew Ebbel, Managing Partner of investor SkyKnight; Marc Stad, Managing Partner of PE investors Dragoneer; and Chris Watson, Partner of specialist insurance and financial services investor Aquiline.
Addesso and Larson are both newly revealed as board members and bring over 40 years’ each in insurance and reinsurance market experience to Core Specialty.
Core Specialty launches with a goal of becoming the leading specialty insurer.
CEO Consolino commented on the rebrand and launch, “Core Specialty has the expanded capital to take on risk, the underwriting talent in place, a proven and decisive leadership team and a track record of making things happen fast. Collectively and in each of our specialist niche business units, we intend to operate with strong entrepreneurial spirit and drive, speed, agility, and empowered decision-making.”
“Core Specialty is truly ‘ready to go’, a theme we are emphasizing as part of our Company rebranding. While others in the market struggle with the uncertainties of catastrophe losses and the ultimate cost of the COVID-19 pandemic or are engaged in the time consuming process of raising capital, obtaining licenses and ratings and hiring qualified staff, we have been executing on our clear business plan since arranging for our capital infusion in early June,” Consolino added.
Consolino further explained, “I am delighted and honored to formally become President & CEO of the Company after working with StarStone U.S. over the past six months. The Company has many talented underwriters and employees and we have had a great response from insureds and their distribution partners. Premium pricing has only further escalated across our classes of business since June, including commercial property, D&O, excess casualty, marine & aviation and professional liability. We are more convinced than ever that a specialist insurance company with the right leadership, financial backing, protection from legacy exposures and niche orientation can create significant value in this environment. We’re ready, equipped, and motivated to get the job done, efficiently and professionally, by empowering our expert team to move quickly on behalf of customers and their brokers.”
Chariman Ed Noonan said, “We have assembled a Board comprised of company founders and business builders which we believe is second to none. I have worked closely with Jeff and many of the Directors for years and believe the mix of their skills and experience will greatly benefit Core Specialty. We are very pleased to partner with patient, long-term investors Dragoneer and SkyKnight who bring a valuable network across both the technology and insurance industries. Following the formation and successful sale of Validus, we are also excited that Aquiline has again invested with us.”
Ebbel of SkyKnight added, “We are excited to partner with Jeff, Ed and Enstar to build Core Specialty into an exceptional specialty carrier executing across both admitted and E&S lines of business. This partnership has been nearly a decade in the making, and we believe this is the ideal time for the Company to execute on an expansion strategy with both a clean balance sheet and fresh capital.”
Stad of Dragoneer said, “At Dragoneer, we focus on partnering with exceptional teams that are building truly differentiated businesses in large markets. We look forward to working with Jeff and Ed as they build a leading specialty carrier at a time when we see very positive, long-term market trends. We have been impressed by Jeff and Ed’s track record of operational excellence, orientation towards disciplined underwriting, and usage of both data and technology.”
Dominic Silvester, CEO of Enstar, commented, “We are impressed with the actions taken to date and Enstar is committed to realizing Core Specialty’s full potential as a specialty commercial property & casualty insurer. Enstar will work with the Company, as opportunities warrant, in our ongoing acquisition activities and we are pleased to maintain our significant investment in the Company. In August, we announced an exchange agreement with Trident V, L.P. and its affiliated funds managed by Stone Point Capital. In the exchange transaction, Enstar will acquire all the Trident V Funds’ interest in the recapitalized Core Specialty, resulting in Enstar having approximately 25% beneficial ownership of the Company, subject to regulatory approvals and closing conditions.”
Jeff Greenberg, Chairman and CEO of Aquiline, also said, “Today’s dynamic market conditions have created a need for dedicated underwriting capacity across multiple E&S and admitted lines of business. We witnessed the strength of the Validus management team first-hand and believe Jeff and Ed will build a market leader at Core Specialty.”