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Reinsurance: GreyCastle Shows Different Approach For New Capital

Insurance Risk, June 20, 2014 – A recent deal between XL and GreyCastle is made possible by the long-term objectives of the buyer’s backers. Rob Mannix spoke to GreyCastle’s chief executive Raymond Brooks about how this approach is different from that of other similar investments.

A recent deal whereby global insurer XL retroceded part of its life reinsurance business to a Bermudian vehicle represents an interesting twist in the trend for new money to come into the insurance and reinsurance space.

“If you think about private equity or hedge funds, they have natural horizons.” says Brooks. “They are five-year or seven-year funds. We purposefully went with family offices and endowments so our horizons are multigenerational. Since we don’t have a fund or similar vehicles, we have an indefinite – that is, infinite-lockup, which is really compelling to the seller. They know we are going to be around for a long time. This is also important from policyholders’ perspective.”

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GreyCastle Holdings Ltd. Completes Acquisition of XL Group’s $5.9 Billion Run-Off Life Reinsurance Operations

June 12, 2014  – GreyCastle Holdings Ltd. (“GreyCastle”) today announced that it has completed the acquisition of the run-off Life Reinsurance operations of XL Group (“XL”) for $570 million in cash. With $5.9 billion in assets, the acquired business is composed primarily of UK and Ireland pension annuities. The transaction was previously announced on May 1, 2014.

“We are pleased to have received the necessary regulatory approvals and we are excited to be completing this acquisition well ahead of schedule,” said Raymond Brooks, Chief Executive Officer of GreyCastle. “This transaction was made possible by our long-term oriented investors and GreyCastle’s talented, growing team of over 30 employees in London and Bermuda. Our team will focus on protecting the rights and interests of policyholders by seeking to achieve stable returns over a long-term horizon. We will also be receptive to future investment opportunities in the reinsurance sector.”

GreyCastle intends for the business to remain standalone with the current operational infrastructure intact. The company is managed and staffed by employees transferring from XL as well as GreyCastle’s experienced team.

GreyCastle is chaired by Lord James Blyth and organized and run by Chief Executive Officer Raymond Brooks. Lord Blyth previously served as Chairman of Diageo and The Boots Company. Mr. Brooks was previously Chief Executive Office of the ACA Financial Guaranty Corporation.

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XL Sells Life Re Arm

Reactions – May 2, 2014  Ireland-based XL group has agreed to sell its life reinsurance arm, XL Life Reinsurance, to GreyCastle Holdings for $570m in cash, as the insurer looks to free up capital for a share buyback scheme …. Read More

 

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