The Hartford has agreed to sell its U.K. property and casualty run-off subsidiaries, Downlands Liability Management Ltd and Hartford Financial Products International Ltd, to an affiliate of Catalina Holdings (Bermuda) Ltd. No financial terms were released for the deal, which is expected to close in the fourth quarter. Catalina, an acquirer and manager of non-life insurance-reinsurance companies in run-off, is backed by Apollo Global Management, Caisse de dépôt et placement du Québec and Ontario Teachers’ Pension Plan (OTPP). Earlier this year, the Hamilton, Bermuda-based company agreed to buy AGF Insurance Ltd.
The Hartford Signs Agreement To Sell U.K. P&C Run-Off Subsidiaries To Catalina
July 26, 2016
HARTFORD, Conn.–(BUSINESS WIRE)–The Hartford has entered into a definitive agreement to sell its U.K. property & casualty run-off subsidiaries, Downlands Liability Management Limited (DLM) and Hartford Financial Products International Limited (HFPI), to Catalina Holdings UK Limited (Catalina). The transaction is not expected to result in a material gain or loss, net of tax effects, on The Hartford’s financial results. The sale is expected to close in fourth quarter 2016, subject to regulatory approvals and other customary closing conditions.
“We are pleased to announce this agreement, which is a good opportunity to permanently transfer our P&C run-off exposures in the U.K.,” said The Hartford’s Chief Financial Officer Beth Bombara. “Catalina is a well-respected organization that specializes in the consolidation of insurance and reinsurance liabilities in runoff.”
The transaction follows the successful completion of a Part VII transfer undertaken by The Hartford to combine all of its run-off U.K. insurance business into a single insurance company, HFPI. Catalina Holdings UK Limited is a wholly owned subsidiary of Catalina Holdings (Bermuda) Limited.
“HFPI is a large and well diversified business, the majority of which has been in runoff since 1993,” said Chris Fagan, Chairman and Chief Executive of Catalina. “It is managed by a professional and experienced team at DLM who will strengthen the breadth and diversity of Catalina’s UK business.”
On closing, all staff will remain employees of DLM, and DLM and HFPI will remain headquartered in Worthing, England.
The U.K. businesses have been largely in runoff since 1993. They primarily consist of U.S. asbestos and environmental liabilities, most of which was previously underwritten by Excess Insurance Company Limited, as well as U.K. asbestos liabilities. At March 31, 2016, DLM and HFPI had total assets of £712 million ($1,023 million), undiscounted gross reserves of £477 million ($686 million), undiscounted reserves net of reinsurance of £359 million ($516 million) and shareholders’ equity of approximately £223 million ($321 million), all stated on a U.S. GAAP basis.
The Hartford’s financial advisor is Barclays, the company’s legal advisor is Freshfields Bruckhaus Deringer LLP, and PricewaterhouseCoopers LLP provided other advisory services.
About The Hartford
The Hartford is a leader in property and casualty insurance, group benefits and mutual funds. With more than 200 years of expertise, The Hartford is widely recognized for its service excellence, sustainability practices, trust and integrity. More information on the company and its financial performance is available at https://www.thehartford.com. Follow us on Twitter at www.twitter.com/TheHartford_PR.
The Hartford Financial Services Group Inc., (NYSE: HIG) operates through its subsidiaries under the brand name, The Hartford, and is headquartered in Hartford, Conn. For additional details, please read The Hartford’s legal notice.
About Catalina Holdings (Bermuda) Ltd
Catalina Holdings (Bermuda) Ltd (“Catalina”) is a long term consolidator in the non-life insurance/reinsurance run-off sector. Catalina was established in 2005 to focus solely on the acquisition and management of non-life insurance/reinsurance companies in run-off. Our shareholders are substantial financial institutions including funds managed by Apollo Global Management, Ontario Teachers’ Pension Plan and Caisse de depot et placement du Quebec. Since its foundation, Catalina has acquired or reinsured over $3.9bn of non-life insurance and reinsurance liabilities in run-off. Catalina has received approvals from Bermudian, Irish, Swiss, UK (FSA/PRA and Lloyd’s) and various US state insurance regulators for prior acquisitions and reinsurance transactions. We currently maintain offices in Bermuda, Denver, Dublin, Hartford, London, New York and Pfaffikon, Switzerland, with over 140 employees. For further details about Catalina’s acquisitions or its management team please refer to www.catalinare.com.
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not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and
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