XL Group completes Catlin acquisition and launches unified brand

As of last Monday all of XL's insurance and reinsurance operations started using the new brand name. The parent company will remain XL Group Plc. The bigger and better capitalised XL Catlin operation is likely to be good news for corporate customers as it promises to offer a broader global platform and increased underwriting capabilities. The combined entity boasts some $10bn in net premiums. The combined company launched a new global marketing campaign on Tuesday using the phrase 'Insurance for a bold new world'.hideXL Catlin said the campaign reflects the 'greater scale, ambition and opportunity for the combined company to develop innovative risk solutions for complex risk problems'. The deal saw XL Group Plc acquire the entire issued and to be issued share capital of Catlin. Catlin shares ceased trading on the London Stock Exchange at 8am on Monday morning. The issue of new XL shares, and dealings in the new XL shares on the New York and Bermuda Stock Exchanges, took place later in the day. XL Group's cash settlement for Catlin is expected to take place by Friday, 15 May. On 30 April holders of Catlin shares were entitled to receive the default consideration of 388 pence in cash and 0.130 new XL share for each Catlin share held. In a note on behalf of himself and Stephen Catlin, founder and previous CEO of Catlin Group Ltd, XL Catlin's CEO Mike McGavick wrote this week: “I’m proud to let you know that as of today, we have closed our transaction. After months of intense work to bring us to this point, that is an incredible thing to be able to say. And as momentous as this day is for all XL Catlin colleagues, we hope it brings you much excitement. For today marks the start of our even stronger partnership with you." He said that XL and Catlin shared similar cultures and values built on teamwork, transparency and trust, as well as business traits that 'equally balance' innovation with disciplined underwriting. "We believe that the specialty and complex risk (re)insurance space is where the greatest opportunities exist for a (re)insurance company like XL Catlin to make the greatest impact. As risks are changing very fast and innovation becomes the most important skill, our new brand reflects our aspiration and what we believe is the real opportunity for XL Catlin to truly break new ground in our sector. And of course, the new XL Catlin name reflects the deep history built by our colleagues around the world, combined into a single company with greater scale and purpose. We're thrilled to launch this brand today and even more excited to be up and running as XL Catlin," said Mr McGavick. As previously announced, Mr McGavick has become CEO of XL Catlin. Mr Catlin has joined XL Catlin as executive deputy chairman, also serving on the company's board of directors. Further key appointments have also been made. Greg Hendrick, previously chief executive of insurance operations at XL, is now chief executive of reinsurance at XL Catlin. Paul Brand, formerly chief underwriting officer of Catlin, becomes chief underwriting officer for insurance and serves as chair of the Insurance Leadership Team. Kelly Lyles, previously XL's head of professional lines, is now chief regional officer, insurance at XL Catlin and deputy chair of the Insurance Leadership Team. Mr Catlin said on the deal: "After 30 years as CEO of Catlin, I'm excited to be taking this next step with XL. Without doubt, today is an exciting day for our new company, XL Catlin. With greater scale, capacity and an expanded platform of products and services, we look forward to creating increased value for our shareholders, clients, brokers, employees and partners." As of Monday Catlin and XL combined many of their offices across the globe. The vast majority of contacts at XL Catlin remain the same as when the two firms operated as separate companies. This includes contact information for underwriters, including phone numbers and legacy emails that will now be forwarded to the new @xlcatlin email addresses. Along with its marketing campaign XL Catlin also launched its new website xlcatlin.com this week. Following the completed deal, AM Best removed from under review with negative implications and affirmed the key ratings of XL Group and its subsidiaries. It affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a+" of the ongoing property/casualty subsidiaries of XL Group. The FSR of A (Excellent) and the ICR of "a+" of Lloyd's Syndicate 2003 (United Kingdom), which is managed by Catlin Underwriting Agencies Ltd, are unchanged. The outlook for both ratings is positive. The syndicate's ratings reflect the financial strength of Lloyd's, which underpins the security of all of the market's syndicates, said AM Best. However, AM Best assigned a negative outlook to XL's ICR ratings. This reflects its concern over the complexity of an acquisition of this size and scope. "In order to achieve the greatest efficiencies and long-term gains, a successful integration must be achieved in a timely fashion. XL has made progress in identifying and retaining key management teams but still needs to integrate operations and systems infrastructure and assimilate company cultures. There is execution risk while this transition is taking place, which is partially mitigated by the collaborative nature of this transaction," said AM Best. During the integration period, AM Best believes there is greater inherent risk to the ongoing operations of the combined company.

XL Group completes Catlin acquisition and launches unified brand

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