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:
- A Bermuda-based insurance runoff acquisition specialist as insurance counsel in an adverse development reinsurance transaction whereby a reinsurance company obtained $540 million of reinsurance from our client for property and casualty reinsurance business written in the US and Europe.
- Enstar Group Limited, a Bermuda-headquartered reinsurer, in a $420 million cross-border deal that includes the reinsurance of a legacy portfolio, including a number of US energy liability, US construction liability and US homebuilders liability insurance portfolios, that were previously written out of Liberty Mutual Insurance Europe SE in London.
- Premia UK Holdings, the Kelso-backed reinsurance group, in its first series of acquisitions in the UK and Lloyd’s insurance market, including the runoff insurance business of Charles Taylor plc managing agency and back book of business.
- Hallmark Financial Services, Inc. in the sale of its legacy book of commercial auto insurance through a loss portfolio transfer agreement by and among five of Hallmark’s property and casualty insurance subsidiaries and DARAG Bermuda Ltd. and DARA Insurance (Guernsey) Limited.
- Randall & Quilter in the acquisition of Global U.S. Holdings Incorporated and its wholly owned New York domiciled insurance company in runoff from AXA DBIO, SCA, a subsidiary of investment funds managed by AXA Liabilities Managers SAS.
- The principal investor in the formation and capital raises for two new runoff sidecars.
- Two new Bermuda-based runoff specialist reinsurers in their formation and capital raises.
- Tokio Marine on its exit solutions for its US, UK and home office legacy books of business, including the establishment of a UK branch and Part VII transfer.
- 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.