Catlin and Brand target $3bn for (re)insurer

Stephen Catlin and Paul Brand are fundraising for a (re)insurance business that could represent the largest balance sheet ever raised in the sector, The Insurance Insider can reveal.

Sources told this publication that the two entrepreneurs, the twin driving forces behind Catlin Group, were working with Evercore and at least one bulge-bracket investment bank to raise a targeted $3bn.

It is understood that the proposed (re)insurer would operate in the London market and Bermuda, with the top company domiciled in Bermuda.

Discussions with potential investors are believed to have taken place already, and steps are thought to have been taken to identify other members of the proposed top team.

One investor source said the business plan was focused on reinsurance and specialty insurance lines. Premium volumes focused on more niche areas will be ramped up carefully because of challenged market conditions.

Details at this stage are scant, with Catlin and Brand working hard to keep the project under wraps until it has progressed further. However, the source said that the funding being lined up has a longer time horizon than traditional private equity money.

The investor source added that with significant M&A activity in the market, the executives are trying to set out a vision of a long-term franchise that offers continuity to client and brokers.

Catlin declined to comment for this article, and Brand could not be reached.

It is not clear at this point whether Catlin would take on the CEO role, or if he would hold the position of chairman, with Brand starting as chief executive.

The biggest fundraising in inflation-adjusted terms in the history of the sector was John Charman’s Axis launch at $1.5bn – or roughly $2.1bn in 2018 terms. Lancashire founder Richard Brindle raised $1.5bn to get Fidelis off the ground in 2015.

Catlin left XL Catlin at the end of 2017, but had a continuing relationship with the company until September, when he stepped down as a special adviser to CEO Mike McGavick.

The end of Catlin’s consultancy arrangement with XL coincided with Axa’s closure of its $15.3bn acquisition of the New York-listed business, which also happened in September.

Brand left XL following the closure of the deal, which has seen the XL Catlin brand XL Group was trading under replaced in most areas by Axa XL.

Catlin founded his eponymous insurance company in 1984 and built the business into a heavyweight of the global specialty market before overseeing its sale to XL for $4.3bn in 2015.

Brand joined Catlin three years after the company was founded, and was effectively the firm’s long-time number two, acting as chief underwriting officer from 2003 onwards.