ERS reveals $350m capital raise amid plans to branch into specialty reinsurance

Specialist motor insurer ERS has announced a $350m capital raise, led by Boston-based private equity firm Abry Partners and investor group Aquiline.

The funding will support ERS in its plans to become a diversified reinsurer and also builds on its recent backing of Lloyd’s Syndicate 1856.

The investment further aims to accelerate ERS’s growth strategy and expansion into specialty reinsurance, but is subject to Lloyd’s business plan approval.

Meanwhile, Aquiline’s Kevin Kelley will join ERS’s senior management team as non-executive chairman.

Peter Bilsby, chief executive at ERS, said: “Over the past months, we have been able to add Syndicate 1856 to the portfolio and attract some of the leading talent in the industry to drive growth.

“This capital raise will provide further support for our transition into a specialty (re)insurer, driven by an experienced management team, strong underwriting talent and the deployment of technology to enhance the client and broker experience. We look forward to working with Abry and continuing our partnership with Aquiline.”

TigerRisk Capital Markets and Advisory and Deloitte Corporate Finance are acting as financial advisors to ERS and Abry on the capital raise.

Meanwhile Norton Rose Fulbright and Kirkland and Ellis are acting as legal advisors to ERS and Abry.

First investment

ERS will launch a Bermuda-based specialty reinsurance vehicle and an insurance-linked securities (ILS) manager over the coming months, both subject to Bermuda Monetary Authority approval, written out of Lloyd’s Syndicates 218 and 1856.

Brent Stone, partner at Abry, said: “This is a unique opportunity to support a great company in its next chapter of growth and development and we are excited to make ERS our first investment at the world’s leading insurance market, Lloyd’s. We are equally as excited to be partnering with Aquiline, one of the pre-eminent investors in the insurance sector.

“We have been very impressed with the ERS team and believe it is set to take advantage of the highly attractive market outlook.”

Jeff Greenberg, chairman and chief executive at Aquiline, added: “Aquiline, Abry and management share a clear vision for the future of the company. We are excited to partner with Abry and to support ERS in its growth and initiatives in this next chapter.”