Independent insurance and reinsurance manager Kane has confirmed that its insurance-linked securities (ILS) and insurance management and administration business is to be sold to broker Arthur J. Gallagher & Co.’s insurance management unit Artex Risk Solutions.
Rumours regarding the potential sale of Kane’s insurance management and administration business, along with its insurance-linked securities (ILS) focused operations, emerged earlier this year. Now the sale has been confirmed by all parties involved, with an acquisition closing date of the 31st March 2016 announced.
Kane operates insurance management businesses in all the world’s major captive insurance domiciles with offices in Bermuda, Cayman, Vermont, Guernsey and South Carolina. The firm was ranked sixth largest globally, in terms of the number of captive insurance structures managed and fourth largest by premium volume in 2015.
Kane’s Insurance Linked Securities (ILS) team has been involved in the catastrophe bond arena since its inception and developed the Kane SAC platform, which helps to facilitate the flow of smaller transactions into the catastrophe bond sector by transforming and securitising collateralised reinsurance deals.
Simon Hinshelwood, Group Chief Executive of Kane, commented on the sale, saying; “Our view at Kane is that the industry as a whole is over supplied and needs consolidation for its long-term future stability and profitability. Kane was approached by a number of parties over the last six months who shared this view. The Board determined that the best way to explore the value of these approaches and to determine what may be the optimum solution for all stakeholders, was to hold a tightly-controlled but small formal process.
“That process concluded with the Board selecting to combine with Artex. Artex was chosen for multiple reasons, but importantly for our staff and clients because of its culture, its distribution reach, its strength in Europe and the USA, and the growth opportunities we believe it affords the Kane team.”
David McManus, President and CEO of Artex Risk Solutions, added; “We believe we’re the fastest growing and most diverse insurance manager in the industry. This exciting combination of operations and capabilities allows Artex to consolidate its position amongst the top three insurance management service providers in the world, with over 1,400 customers, served through over 900 risk bearing entities in 27 domiciles and 370 employees, providing our clients and business referral networks with substantially greater scale and resource breadth.”
Key Kane insurance and ILS management employees Robert Eastham, Linda Haddleton, Ann West and their associates are all expected to remain with the unit as it moves across to Artex.
“Kane is rightly recognized in the industry for the quality of its people and its innovative products and platforms. This merger strengthens us considerably in Cayman and Bermuda and brings us industry-leading expertise in Insurance Linked Securities and structured transactions administration. Combining these resources with the power of Artex’s distribution network is expected to drive exponential growth in each of the domiciles represented. This truly is a transformational merger and I’m delighted to welcome Rob, Linda, Ann and their teams to Artex,” McManus continued.
Artex’s existing business operations in Bermuda and Cayman will combine with Kane’s under the respective leadership of Rob Eastham and Linda Haddleton. These teams, together with Kane’s Guernsey team, will report into Nick Heys, CEO of Artex International. Kane’s US operations in South Carolina and Vermont will merge into Artex’s US business under the leadership of Jennifer Gallagher, President of Artex North America.
J. Patrick Gallagher, Jr., Arthur J. Gallagher & Co.’s Chairman, President and CEO, commented; “KIM is highly regarded for its industry-leading expertise in the ILS market and its emphasis on quality customer service. KIM’s specialized products add to Artex’s client capabilities, and its team will expand Artex’s presence, particularly in Bermuda and Cayman. This group will be a wonderful complement to Artex Risk Solutions as it continues to add innovative client products and extend its international footprint. We are extremely pleased to welcome Rob, Linda, Ann and their colleagues to our growing family of risk management professionals.”
Kane LPI Solutions Limited and its subsidiaries, which includes Kane’s third party administration and fund administration business for the Life, Pension and Investment market, was not included in the sale process and will continue as a Kane business. Kane LPI Solutions has its own corporate structure and operations in Bermuda, Cayman, the US, Malta and the UAE and will continue under the leadership of John Uprichard, its Managing Director.