UK-listed insurer Wellington Underwriting has joined forces with Candover and Blackstone to establish a new London-based insurance company. The two private equity firms have co-led an equity syndicate which has contributed £448m to the creation of Wellington Re, which will specialise in property and casualty reinsurance, as well as UK commercial insurance.
The firm, which will become one of the largest independent reinsurance vehicles in the London market, is likely to become operational next month and expects to write approximately £200m of net premium in 2002. Wellington Re creation follows the massive rise in premiums that resulted from the events of September 11 and a shortage of underwriters.
In addition to Candover and Blackstone, investors in Wellington Re include CSFB Private Equity, Montpelier Re, 3i, Phoenix Equity Partners, Olympus Partners, Lexicon and Wellington Re Management. Paul Myners will chair the new firm’s board, with Chris O’Kane becoming chief executive. Around 40 Wellington employees will transfer to the new company. Blackstone senior managing director Bret Pearlman said the management team was a major factor in its investment, describing it as ‘exceptional’.
This is Candover’s second investment from its Candover 2001 Fund, following the E185m investment in Swissport back in February. Candover managing director Marek Gumienny said he had confidence in the track record of the Wellington managers. 'We’ve had a long relationship with Wellington Underwriting and are delighted to be backing [the firm] at this point in the insurance cycle.”