ProSight strikes reinsurance deal with Enstar after $586m sale; makes Ritz CEO

ProSight Global is to be acquired by private equity firms TowerBrook Capital Partners and Further Global Capital Management in an all-cash transaction valued at $586 million. Meanwhile, the US specialty insurer has entered into a reinsurance deal with Bermuda-based  Enstar Group.

The merger agreement, which ProSight said was recommended by a special committee of its board of directors, will enable it to become a private company with the flexibility and capital to accelerate its next stage of growth.

The deal will see the two firms acquire all outstanding shares of common stock of ProSight Global with TowerBrook taking a majority stake and Further Global serving as a key minority co-investor.

Enstar's subsidiaries will provide reinsurance relating to ProSight's 2019 and prior year business. The reinsurance will comprise a ground up loss portfolio transfer of its discontinued workers’ compensation and excess workers’ compensation lines of business and an adverse development cover on its diversified mix of general liability classes of business.

ProSight will cede net loss reserves of approximately $500 million and Enstar’s subsidiary will provide an additional aggregate limit of $250 million.

The reinsurance transaction is subject to the closing of a broader strategic transaction, as well as other regulatory approval and closing conditions. Meanwhile, its acquisition has been approved by its full board and is expected to close in the third quarter of 2021.

Upon closing, Jonathan Ritz will become CEO, while ProSight's current president and CEO Larry Hannon will continue serving as president.

Ritz joins ProSight after previously serving as president of Aspen Insurance Holdings, chief operating officer of Validus Holdings, and chief executive officer of Validus Specialty.

"This is a very exciting and challenging insurance market which is undergoing significant changes in distribution, pricing, capital management, and capacity exiting across many lines of business," said Ritz.

"Increased frequency and magnitude of natural catastrophes, social inflation, and the COVID-19 crisis have contributed to substantial market dislocations, and ProSight represents a quality platform that is well-positioned to capitalize on this environment. I am looking forward to working with the Company's many talented underwriters, employees, and distribution partners to build a market-leading specialty insurance company."

Hannon added: "This transaction and the new partnership with TowerBrook and Further Global will expand ProSight's underwriting capabilities and fund investments in talent and technology that will improve our offerings to distribution partners and customers.

"Since our founding 12 years ago, our employees have dedicated themselves to creating a differentiated specialty insurance company. I'm very proud of what we created, thank them for their dedication, and very much look forward to working closely with Jonathan as we write ProSight's next chapter as a private company."