Citadel Risk has injected US$25 million into Citadel Reinsurance Company Bermuda to strengthen the group’s balance sheet.
The latter provides reinsurance programmes in prospective and niche coverage, fronting, legacy and exit solutions, and captives and risk retention groups.
The capital injection brings the reinsurance company’s total balance sheet to $47.1 million as at 30 September.
Citadel Risk has also invested $10 million in the balance sheet of American Millennium Insurance Company (AMIC), bringing the total to $21.9 million as of 30 September.
In addition, A reinsurance stop-loss has been put in place to cap the AMIC losses which led to a rating downgrade by A.M. Best in February 2021.
These three capital investment and structural changes are subject to regulatory approval.
Citadel Risk’s consolidated pre-tax profit for the first half of 2021 was $2.5 million, with consolidated surplus at year-end expected to be $55 million and an additional $20 million projected for early 2022.
Tony Weller, CEO of Citadel Risk Group, comments: “It has been a tough year for Citadel, and I am extremely pleased to announce this major investment and financial strengthening of the group’s balance sheet.”
“The enhanced capital base will allow us to write larger lines and develop AMIC into a wider and more diverse insurance entity. The group will be preparing new submissions for an immediate re-rating with A.M. Best, and the enhanced capital structure will be a positive uplift.”
