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.”
AIG 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.
