DARAG Group (DARAG) has completed a new agreement with an undisclosed captive insurance company.
The structure of the transaction was an altered version of its 03-06 and 15/16 policy years, primarily with workers’ compensation reserves. This allowed the counterparty full finality, with DARAG facing the original fronting issuer.
Written into DARAG Bermuda, the transaction value was approximately US$30 million on the reference date. DARAG Group indicates that DARAG Bermuda has a strong balance sheet and high solvency ratio as a result of the recent commutation of a large commercial auto book.
Commenting on the transaction, Tom Booth, CEO of DARAG, says: “DARAG has developed an excellent track record in this core niche of small to mid-sized captive and self-insured portfolios in North America. Our focus on underwriting discipline and risk management is central to our expansion. Our appetite to continue growth in this area is therefore stronger than ever. We expect to announce another similar sized transaction shortly and the pipeline for the remainder of the year is beyond expectations.”
He adds: “DARAG Bermuda is a core carrier for the Group and now benefits from a well-diversified, mature and low volatility portfolio. [We] continue to have a wealth of attractive opportunities and the capacity to execute deals in our traditional area of focus.”
Joel Neal, executive vice president of M&A ar DARAG North America, says: “We are seeing a continued need for improved operational efficiency in the North American market. Transactions such as these enable our clients to achieve this, while simultaneously freeing up trapped capital. We look forward to announcing further transactions in the future.”
