The deal marks the formal exit of American Financial from the Lloyd’s of London marketplace
American Financial Group (AFG) has signed a deal to sell its run-off Lloyd’s of London-based insurance business Neon to private equity firm RiverStone for an undisclosed price.
As per the terms of the deal, the private equity firm will acquire GAI Holding Bermuda and its subsidiaries, which comprise the legal entities that own Neon.
RiverStone UK managing director Luke Tanzer said: “We are delighted that AFG has selected RiverStone as their partner for this transaction.
“We have worked closely and collaboratively with AFG to ensure that their strategic objectives are achieved through this transaction, and we will ensure that Neon insureds continue to receive the highest possible level of service.”
Following the completion of the deal, American Financial Group expects the release of all of its funds at Lloyd’s. These include the release of the letters of credit and also collateral pledge facility that the US insurance holding company guaranteed in support of Neon’s funds at Lloyd’s.
The deal marks the formal exit of American Financial Group from the Lloyd’s of London insurance market, which was announced in January 2020. Since then, Neon Underwriting placed Syndicate 2468 into an orderly run-off.
Exit from Lloyd’s to help American Financial to focus on other specialty P&C businesses
American Financial Group co-CEO Carl Lindner III said: “The sale of Neon finalizes AFG’s exit from the Lloyd’s market, following AFG’s decision to place this business into run-off effective in the fourth quarter of 2019.
“The exit allows us to provide continued focus on our other Specialty P&C businesses and enables us to redeploy capital, increase earnings and returns, and create long-term value for our shareholders.”
The deal, which is subject to receipt of the necessary regulatory approvals and meeting of other customary conditions, is anticipated to close in Q4 2020.
Based in Ohio, American Financial Group is mainly engaged in property and casualty insurance, through the operations of Great American Insurance Group.
The insurance holding company reported Q2 2020 net earnings attributable to shareholders of $177m or $1.97 per share, compared to $210m or $2.31 per share in the same quarter in the previous year.