ERS raises $350m as specialty lines & ILS build-out continues

As once motor-focused specialist insurer ERS continues its expansion and diversification into a multi-line insurance, reinsurance and insurance-linked securities (ILS) operation, the company has raised $350 million of capital from private equity investors.

Existing investor Aquiline has led a private investor group into this capital raise, alongside Abry Partners, a Boston-based private equity firm.

As we’ve reported previously, ERS has been branching out into specialty lines and also reinsurance, with one of the most recent example of this being its move to back the Arcus 1856 syndicate at Lloyd’s, taking over the operation from the Credit Suisse Insurance-Linked Strategies (ILS) team.

The company is also in the process of building out an insurance-linked securities (ILS) investment fund management operation, as collateralised reinsurance underwriting and capital management are seen as growth opportunities and a way to diversify further away from the traditional ERS Lloyd’s motor focused book, while leveraging efficient capacity sources, providing broad benefits to the group.

In announcing the $350 million capital raise today, the company said that the financing will accelerate its growth strategy and expansion into specialty insurance and reinsurance business lines

As well, ERS expects the funding will also assist as it launches a Bermuda-based specialty re/insurance vehicle and its ILS manager over the coming months.

Peter Bilsby, Chief Executive Officer of ERS, commented, “Over the past months, we have been able to add Syndicate 1856 to the portfolio and attract some of the leading talent in the industry to drive growth. This capital raise will provide further support for our transition into a specialty (re)insurer, driven by an experienced management team, strong underwriting talent and the deployment of technology to enhance the client and broker experience. We look forward to working with Abry and continuing our partnership with Aquiline.”

Brent Stone, Partner at Abry, added, “We have been very impressed with the ERS team and believe it is set to take advantage of the highly attractive market outlook. This is a unique opportunity to support a great company in its next chapter of growth and development and we are excited to make ERS our first investment at the world’s leading insurance market, Lloyd’s. We are equally as excited to be partnering with Aquiline, one of the pre-eminent investors in the insurance sector.”

Jeff Greenberg, Chairman and Chief Executive Officer at Aquiline, also said, “Aquiline, Abry and management share a clear vision for the future of the company. We are excited to partner with Abry and to support ERS in its growth and initiatives in this next chapter.”