American International Group (AIG) and The Carlyle Group have completed creation of a new run-off reinsurer Fortitude Re (formerly DSA Re).
In August this year, the companies partnered to build AIG’s Bermuda-based reinsurer DSA Re into standalone provider reinsurance, claims handling and run-off management solutions.
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As part of the deal, Carlyle has now completed its acquisition of a 19.9% stake in Fortitude Group Holdings, whose group companies operate as Fortitude Re.
The transaction secured regulatory approval and satisfactions of other customary closing solutions.
Fortitude Re CEO James Bracken said: “We are hard at work building Fortitude Re for long-term success. The closing of Carlyle’s investment and brand launch are two key milestones on that journey.”
Carlyle Global Financial Services Partners managing director and co-head Brian Schreiber said: “We look forward to working with our partners at AIG and Fortitude Re to grow the business and extend Carlyle’s asset management platform.”
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By GlobalDataAIG announced the formation of DSA Re as its main run-off reinsurer in February this year.
The new entity was intended to reinsure the company’s Legacy Life and Retirement and Legacy General Insurance run-off lines, while improving operational efficiencies.
AIG said that estimated amount to be reinsured after receipt of all regulatory approvals represents around $37bn, and will be backed with nearly $40bn of invested assets managed by AIG Investments.
