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Markel To Acquire Nephila Holdings Limited

Image of Handshake Merger
September 18, 2018

At the end of August, Markel Corporation (Markel) and Nephila Holdings Limited (Nephila) entered into a definitive agreement for Markel to acquire all of the outstanding shares of Nephila.

In a statement, Markel said that Nephila, the top insurance-linked securities manager in the world, whose revenue is driven primarily through management and incentive fees, manages over $12 billion of assets under management for over 300 geographically diverse investors. 

Richie Whitt, Markel's co-CEO, commented, "The addition of Nephila to Markel's insurance, reinsurance, InsurTech, fronting, and existing insurance-linked securities capabilities will enhance and strengthen the breadth and depth of Markel's offerings to policyholders, producers, and investors."

Frank Majors, Nephila's co-CEO, said, "Markel shares our strategic vision for the future of the insurance markets; this transaction will allow us to accelerate our delivery of that strategy, creating additional value for our investors and our trading partners."

Greg Hagood, Nephila's co-CEO, added, "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. We are excited about leveraging these joint resources on behalf of our investors in the years ahead."

Upon completion of the transaction, Nephila will continue to operate as a separate business unit. The management team, led by Mr. Hagood and Mr. Majors, will remain in place and will continue to be based in Bermuda, San Francisco, Nashville, and London. 

The transaction, which is subject to approvals by relevant insurance regulators and other customary closing conditions, is expected to close in the fourth quarter of 2018. The transaction is not subject to any financing condition, and Markel plans to finance the transaction using cash balances on hand.

Mr. Whitt added, "The combined assets under management between Nephila and Markel CATCo will stand at approximately $19 billion, representing approximately 20 percent of the insurance-linked securities sector. With this transaction, Markel is set to become the largest manager of funds in this sector."

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