Charles Taylor and the Standard Club said they had agreed to sell jointly owned Charles Taylor Managing Agency (CTMA), and associates including the Standard Syndicate, to run-off specialist Premia.
CTMA staff will transfer to Premia, which the companies said will develop additional reinsurance-to-close (RITC) and legacy solutions for Lloyd’s businesses.
They did not disclose financial terms of the transaction.
This publication reported the imminent deal on Sunday and noted that Premia’s entry into the Lloyd’s RITC market challenges the dominance of Enstar. Charles Taylor announced the sale as it reported first-half results including 26 percent growth in adjusted pre-tax profit to £7.3mn ($9mn).
Premia prevailed in the bidding for CTMA/the Standard Syndicate over a partnership of Compre and Hudson Structured. Early front-runner Catalina exited the process over a month ago.
Premia secured "shelf" approval to form a Lloyd's syndicate earlier this year but required a starter legacy transaction in order to do so.
In the statement, Premia CEO William O'Farrell said: "This acquisition will enable us to deliver the same professional management of run-off to Lloyd’s insurers with trapped capacity and legacy portfolios and we are committed to providing continuity in the run-off of Syndicate 1884. We have the financial and operational capacity and expertise to deliver high-quality solutions to Lloyd’s insurers.”
Charles Taylor entered Lloyd’s as a managing agency with the Standard Syndicate as its debut turnkey in 2015.
But the business suffered from management turnover, concentration in poorly performing lines and inadequate scale.
Syndicate 1884 was effectively forced into run-off by Lloyd’s last year, as part of performance management director Jon Hancock’s efforts to address the performance gap.
The Standard Club explored moving the underwriting business into the company market as an MGA and even had the promise of paper from an insurer. But the protection and indemnity club ultimately decided not to press ahead.
Willis Re Corporate Solutions advised Charles Taylor and the Standard Club.
The transaction with Premia requires clearance from Lloyd's, the Prudential Regulation Authority, the Financial Conduct Authority and the Monetary Authority of Singapore.
Charles Taylor's first-half earnings growth was propelled by claim services, where adjusted operating profit rose 35 percent to £5.4mn. CEO David Marock said the division had achieved new client wins as well as acquired growth.
Insurance management profit rose more than 20 percent to £5.3mn. Charles Taylor serves various mutual insurers.
Charles Taylor InsureTech nearly broke even, with the operating loss shrinking by almost half to £900,000. The company said the unit is continuing to win new business in Europe and beyond and that this should benefit the second-half performance.