Mayer Brown is a leader in developing legal solutions for the runoff market. We are exceptionally well-positioned to advise clients on the optimal management of their legacy liabilities.
The efficient management of runoff business is a critically important issue for the insurance industry in the United Kingdom, Continental Europe and the United States, particularly with the advent of Solvency II and emerging international insurance capital standards.
Mayer Brown’s runoff solutions team combines a detailed and practical knowledge of the global (re)insurance markets with restructuring and insolvency experience.
We provide “cradle to grave” advice for clients, from entering the runoff market, to managing discontinued operations, to ultimately achieving an appropriate exit strategy, including by way of:
- the purchase and sale of runoff portfolios;
- the outsourcing of the runoff of portfolios or of the underlying information technology operation;
- the commutation of books of business or individual contracts; and
- the reinsuring or retroceding of legacy liabilities by stop loss covers, adverse development cover and loss portfolio transfer arrangements.
Mayer Brown has also been at the forefront of the development of third-party risk capital arrangements for the runoff markets, including the formation of fund-backed joint ventures.
Our experience includes representing the following clients:
- The Hartford Financial Services Group, Inc. on its definitive agreement with National Indemnity Company, a subsidiary of Berkshire Hathaway Inc., for a $1.5 billion aggregate excess of loss reinsurance agreement covering certain of The Hartford’s asbestos and environmental liability exposures.
- Premia Holdings, Ltd. in the acquisition of Alan Gray LLC, a highly respected international claims, audit and risk management advisory firm.
- A Bermuda-based reinsurer in the acquisition of a significant block of US program casualty business from a US-based insurer.
- Catalina Holdings (Bermuda) Ltd, a long-term consolidator in the non-life insurance/reinsurance runoff sector, on its acquisition of a $410 million portfolio of US property & casualty liabilities in runoff from Arch Reinsurance Ltd.
- Catalina Holdings (Bermuda) Ltd in the acquisition of a $190 million portfolio of legacy US property/casualty insurance liabilities from the US branch of Samsung Fire and Marine Insurance Co. Ltd.
- A Bermuda-based reinsurer as fronting reinsurer in an insurance runoff solution for a £170m UK employers’ liability book.
- Catalina Holdings (Bermuda) Ltd on its acquisition of SPARTA Insurance Holdings, Inc., and on its agreement to acquire Alea Group Holdings (Bermuda) Ltd.
- Tokio Marine Group, in the sale of its global property/casualty reinsurance runoff portfolio written by Tokio Marine & Nichido Fire Insurance Co., Ltd. (Japan) to a runoff reinsurer.
- A UK subsidiary of Fairfax Financial in its acquisition of Brit Insurance Limited, an FSA regulated insurance company.
- OneBeacon Insurance Group, Ltd. in the sale of its runoff business to an affiliate of Armour Group Holdings Limited.
- Randall & Quilter (R&Q) in the acquisition of the insurance services businesses Reinsurance Solutions Limited (UK) and Reinsurance Solutions LLC (US) from Guy Carpenter & Company, LLC and Marsh Limited, as well as the acquisition of Excess & Treaty Management Corporation, a management company for the runoff of the Excess Casualty Reinsurance Association from Guy Carpenter & Company, LLC.
- SeaBright Holdings, a publicly traded worker’s compensation insurer, in its $252 million buyout by Bermuda-based Enstar.