The business is being sold to Pelican and J.C. Flowers as part of Argo’s plans to simplify its business and streamline operations

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Pelican and J.C. Flowers to acquire Ariel Re from Argo Group. (Credit: Tumisu from Pixabay)

Bermuda-based Argo Group International has signed an agreement to divest its reinsurance business Ariel Re to Pelican Ventures and J.C. Flowers & Co. for an undisclosed price.

The two buyers are private equity investors having expertise in the insurance sector, while Argo Group is an underwriter of specialty insurance and reinsurance products.

The Ariel Re divestment is part of Argo Group’s strategy to simplify its business and streamline operations.

Ariel Re is engaged in underwriting a global portfolio of reinsurance products via its Bermuda and Lloyd’s platforms. The company also has offices in Hong Kong and Brussels.

It was founded in 2005, and in 2017, was merged with Argo Group’s Argo Re business. The Ariel Re brand has been used for writing all the Argo reinsurance business.

Argo Group CEO Kevin Rehnberg said: “Ariel Re is well known in the reinsurance market, and we are confident the business will thrive as part of Pelican Ventures.

“Argo Group will continue to focus on specialty insurance lines of business that we expect will result in profitable growth and improved shareholder value.”

Under the terms of the deal, the buying group’s corporate member will provide the capital of the acquired reinsurance company for the 2021 year of account. Argo Group, on the other hand, will retain historical reserves.

Pelican Ventures co-founder Jim Stanard said: “Pelican Ventures is excited to be investing in Ariel Re and bringing on board talented professionals with unparalleled reinsurance market underwriting expertise and risk management analysis skills.

“With the financial strength and insights of our new ownership group and under the leadership of Ryan Mather, we will pursue our ambition of building a world-class manager of (re)insurance risk.”

The completion of the deal is expected to occur this year upon receipt of regulatory approval.

The sale of Ariel Re follows the plans disclosed by Argo Group of dropping its grocery and retail business unit by placing it into run-off with immediate effect. The Argo Group unit offers general liability and self-insured retention risk management programmes to retail businesses.