Inigo launches with $800m from pension, sovereign wealth & PE investors

Inigo Insurance is launching in time for the January renewals as a London headquartered and Lloyd’s market focused specialty insurance and reinsurance underwriter, with $800 million of funding from a range of pension, sovereign wealth and private equity investors.

Subject to approval from the Corporation of Lloyd’s, Inigo Insurance is set to become the latest new entrant to the market for 2021.

The $800 million of funding has been raised from a global who’s who of investors that allocate to new insurance and reinsurance start-ups, including funds controlled by pension investor Caisse de dépôt et placement du Québec (CDPQ), legacy specialist underwriter and re/insurance sector investor Enstar, private equity giant J.C. Flowers & Co., alternative investment firm Oak Hill Advisors, sovereign wealth investor the Qatar Investment Authority, re/insurance and financial services focused private equity specialist Stone Point, Inigo’s management team and others.

Founding Inigo are Richard Watson, former Chief Underwriting Officer of Hiscox, Russell Merrett, former Managing Director of Hiscox London Market, and Stuart Bridges, former Chief Financial Officer of both Hiscox and ICAP. Sir Howard Davies, Chairman of NatWest Group, has been appointed as Chairman of Inigo.

Inigo has agreed to acquire certain insurance underwriting assets of StarStone Underwriting Ltd. including its Lloyd’s Syndicate 1301 and its managing agency, from Enstar Group, subject to regulatory approvals.

This acquisition frees Enstar from its obligations to run these businesses which it had previously acquired, while Enstar takes a stake in Inigo in their place.

These structures will form the base for Inigo’s operations as a specialty insurer, writing a streamlined portfolio of both insurance and reinsurance risks. Inigo will not take on any legacy exposure through the acquisition.

Inigo says that current market conditions are ideal to launch a new insurance and reinsurance business.

The Class of 2020/21 start-ups are all in unison on this point, that despite the fact the industry does not lack capital they feel there is a distinct opportunity to launch into it right now and are confident in their ability to build portfolios of quality risks.

How successful all of the start-ups will be remains to be seen, as being new to the market does always come with a need to be very competitive on price as well.

Inigo sees demand as high across a number of classes of insurance and reinsurance, which is likely where the start-up will focus.

The company said it has chosen London as its base because, “The overall insurance ecosystem offered by Lloyd’s as exceptionally attractive and believes it will best support the growth and development of the new syndicate.”

Richard Watson commented on the launch of Inigo, “This significant capital raising, together with our acquisition, gives us the platform we need to turn Inigo from a concept into reality. We believe that 2021 will mark the beginning of an exciting growth phase for Lloyd’s and the London Insurance Market and Inigo will contribute to growing the specialty and reinsurance marketplace, as it returns to profitability. Sir Howard Davies joining our board validates our vision for Inigo and our determination to provide credible additional capacity and services to customers and brokers.

“We are fully supportive of the direction that John Neal, Lloyd’s CEO, is taking the market, making it a more attractive and efficient place in which to trade. For a company like ours, entirely focused on underwriting, London also has the depth of young talent we need to develop the analytical and data-led approach that is at the core of what we hope to do.”

Inigo is not the biggest capital raise for a start-up, but with an established platform of underwriting structures, a well-regarded management team of founders and funding from significant investors in the insurance and reinsurance sector, if the first year proves profitable it can likely raise further capital to expand for the 2022 underwriting year and beyond.

Of course, profitable underwriting will be what the investors need to see, so the pressure will be on Inigo, like all the other start-ups, to demonstrate why they can enter the market and be more profitable than many of its incumbents have been.