Kane eyes further growth following HSBC deal

The group also believes that its greater reach, wider range of services and the fact that it is not tied to a broking firm will help generate increased growth as risk managers seek new options to manage their risk management and transfer needs. Kane will fund the $27.5m HSBC acquisition once regulatory approvals are received with capital provided by private equity firm CBPE Capital. This the first move into the insurance market by CBPE and sources close to the group said that the investors are impressed by growth opportunities in the captive and wider insurance services market and have provided extra funds for future deals. The Bermuda-based HSBC insurance management business is mainly US-focused and Kane, already the biggest independent captive manager in the world, has a footprint in Europe’s main captive domiciles and the Middle East. hideSources said that the Middle Eastern operations act as a natural ‘bridgehead’ to Asia where captive use is still low but is expected to grow fast particularly as European and US companies seek growth in the region through expansion. Kane signed the complex deal with HSBC Bank Bermuda, HSBC Bank Cayman Ltd and HSBC Insurance Agency (USA) Inc and through it will acquire HSBC Insurance Holdings (Bermuda), HSBC Insurance SPC Ltd, the insurance management business and assets of HSBC Bank (Cayman), and HSBC Insurance Agency (USA). HSBC Insurance Management (known as HIM) claims to be the world’s fourth largest insurance manager and a leader in the field of Insurance Linked Securities (ILS). HIM has a global network of offices in Bermuda, Cayman, Guernsey, Malta, New York, South Carolina, Washington DC and Vermont and is approved to provide insurance management services in six other US states. HIM has a broad portfolio of services that Kane believes will add to its existing offering and help attract further new business from risk managers in search of new options. The company provides management, administration and structuring support services for captives; cell companies, insurance linked securities, insurance and reinsurance companies and life, pensions and investment (LPI) companies. Stephen May, CEO of Kane, said: “This agreement is a major step forward in the overall growth strategy for Kane. The acquisition will position us as the world’s largest independent insurance manager and clearly supports our aim of creating a global, domicile-neutral platform from which to offer our independent, expert advice. We welcome the new employees and customers of HIM into our group and look forward to building and developing long-term successful relationships.” Kane said that HSBC will work closely with Kane to ensure a ‘smooth integration’ of HIM into the group and Kane has offered employment to all HIM staff. Roy Fellowes, CEO of HIM, said: “We are excited about becoming a part of the Kane Group and delighted they have embraced, and are committed to supporting and growing, all current HIM business lines. “Kane and HIM have a number of synergies, not only in relation to the products and services we provide, but also in terms of the culture and approach of the two organisations. These synergies will enable a successful transition and ensure that we maintain the high levels of service which our customers expect.” Clive James, a director of Kane, said: “The acquisition of HIM provides a strong fit for Kane. We have established an excellent reputation in the provision of alternative risk transfer services, and are keen to bolster our activities in all of the sectors in which HIM presently operates. The company provides a large and secure base in a number of key insurance territories coupled with a significant presence in traditional captives, and the specialist ILS and LPI markets.” A full analysis of the deal and the interview with Kane executives will follow in the April issue of Commercial Risk Europe.

Kane eyes further growth following HSBC deal

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