Markel has agreed to acquire Nephila, a Bermuda-based investment manager specializing in reinsurance risk, for an undisclosed price.
Nephila provides a range of investment products focusing on instruments such as insurance-linked securities, insurance swaps, catastrophe bonds and weather derivatives.
The company, which earns mainly through management and incentive fees, manages more than $12bn of assets under management for over 300 investors located in different parts of the world.
Markel believes that the addition of the unique and proven talents of Nephila to its specialty insurance and reinsurance platforms will result in a better combination that will deliver long-term growth and value to the benefit of its investors.
According to Markel co-CEO Richie Whitt, the global insurance company with the combination of Nephila and the company’s insurance, reinsurance, insurtech, fronting, and current insurance-linked securities capabilities will improve and consolidate its offerings to policyholders, producers and investors.
Post-acquisition, Nephila will continue to operate as a separate business entity with its management team, headed by Greg Hagood and Frank Majors, to be retained.
Whitt said: “We are excited to welcome Nephila to the Markel team. Frank Majors and Greg Hagood have built the industry’s pre-eminent and longest-tenured insurance-linked securities manager.
“With a proven 20 year track record of success, they bring with them an incredibly experienced and talented management team and a culture of creativity, innovation and excellence that exemplifies the Markel Style.
The acquisition is likely to be completed in the fourth quarter of this year, provided it gets approvals by relevant insurance regulators and meets other customary closing conditions.
Nephila co-CEO Greg Hagood said: “As the industry continues to evolve, we believe the resources and expertise from both platforms will provide meaningful benefits to our investor base, as it combines the investment independence of a 20 year, stand-alone insurance-linked securities manager with the additional resources of a well-respected and strongly rated insurer.”
Recently, Markel secured an approval from the German federal financial supervisory authority BaFin to set up a new insurance company in Germany.