Fidelis Insurance has received regulatory approval for its new managing general underwriter (MGU) that is expected to begin operations on 1 January 2023.
Fidelis said the new MGU will be separate from the existing balance sheet of its insurance companies under Fidelis Insurance Group. The transaction to create the MGU was originally announced and agreed in July this year.
Approvals or non-objections have been received from the Financial Conduct Authority and Prudential Regulation Authority in the UK, the Central Bank of Ireland, the Financial Services and Markets Authority in Belgium, and the Bermuda Monetary Authority.
The Fidelis MGU will be led by chairman and chief executive officer Richard Brindle, while Fidelis Insurance Group will be led by chief executive officer Dan Burrows. Fidelis said all capital and risk transfer resources currently available to Fidelis brokers and clients will continue to be available.
Brindle said: “We are delighted to have received confirmation of all necessary regulatory approvals. This has been a groundbreaking transaction that will enable the separated entities to focus on what they do best, and we are keen to move forward and focus on our clients and brokers. I would like to thank everyone who has been involved in this deal and I am excited for the future of these two entities.”
The Fidelis MGU’s principal equity investors at completion will be Capital Z Partners, The Travelers Companies, Blackstone, Further Global Capital Management and Alfa Insurance.
The Fidelis Insurance Group capital structure will remain unchanged, as will its investors, apart from the purchase of a 9.9% stake in Fidelis Insurance Group by the Fidelis MGU from existing shareholders.
Burrows said: “Receiving regulatory approval is an important step in this intelligent and innovative transaction. Fidelis Insurance Group will benefit from providing long-term capacity to the Fidelis MGU, along with mechanisms to ensure alignment between the separated companies. We look forward to the start of this long-term and successful partnership, which will be focused on the continued delivery of underwriting outperformance within the insurance and reinsurance sectors.”