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Marco gains Lloyd’s approval for RITC syndicate

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Legacy acquirer Marco has gained in-principle approval to launch a reinsurance-to-close (RITC) syndicate at Lloyd’s.

It is understood the syndicate will be hosted by third-party managing agent Capita, and formal approval of the syndicate is subject to completion of the “making it happen” review phase.

Marco formally launched in the summer of 2020 with EUR500mn ($589.7mn) of capital committed by Oaktree.

The legacy start-up is led by former Darag CFO Simon Minshall, with former Allianz CFO Dieter Wemmer as chairman.

In launching the syndicate, Marco will benefit from the experience of its head of M&A Zsolt Szalkai, who, at his previous firm, played a key role in the oversight of Premia’s RITC syndicate as the carrier’s European president.

The legacy start-up has already transacted deals with Allianz in terms of buying infrastructure to start writing risk. It acquired non-life carrier Bric from the insurer at the start of this year. Since launch, it has also sealed deals to acquire an Isle of Man-based captive insurer and set up a licence in Malta.

Marco’s launch marks the latest RITC syndicate to set up at Lloyd’s, following Compre’s move to establish a vehicle under an Apollo turnkey at the beginning of the year.

CEO Minshall said: “Lloyd’s represents a major marketplace for P&C run-off transactions, comprising RITC, which is unique to Lloyd’s, and other legacy solutions for business written by Lloyd’s syndicates.

“We are very pleased to have reached this stage early in Marco’s history. Receiving Lloyd’s approval validates Marco’s professional approach and its excellent reputation. This is a significant step forward in the development of our franchise.”

A flurry of new RITC vehicles has increased competition in what was once a very concentrated market, with Enstar’s Shelbourne syndicate and RiverStone dominating the space and R&Q executing on some deals.

Premia launched its own vehicle via the acquisition of Charles Taylor Managing Agency and the Standard Syndicate, while Compre confirmed its own launch in February this year.

There is expectation in the run-off market that Lloyd’s will look to RITC significant volumes of liabilities as a result of exited classes and remediation enforced by the Corporation in its performance drive.

Recent RITC deals include a £370mn ($515mn) transaction for legacy liabilities from 2018 and prior years of account for Hamilton Syndicate 4000, agreed with RiverStone Europe. The deal followed an RITC transaction between the legacy carrier and Argo’s Syndicate 1200 for net technical provisions of about £356mn.

As part of Compre’s syndicate launch, it also agreed a deal with turnkey Apollo that the new vehicle would house Syndicate 1969’s prior-year portfolio, which includes US liability, marine, energy and property risks with net reserves of about $125mn.

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