M&A

Kiln and UPC partnered to form the insurer in 2018, but it was merged into American Coastal earlier this year

FedNat will retain a minority interest along with representation on the board.

Elliott Management, the other key suitor for the business, is understood to have dropped out of the auction.

This is UPC’s latest attempt to downsize after offloading part of its personal lines business to HCI.

After securing a $1.6bn deal to acquire TigerRisk, Howden said the transaction will create a “much-needed fourth global player” in reinsurance.

This publication first revealed that the two parties were working on the deal last month.

Sources indicated talks have been conducted using an adjusted Ebitda figure for TigerRisk of around $85mn-$90mn, which is far higher than previously thought.

It is understood that the highest bidder was a consortium formed by Fortitude and Global Atlantic.

A takeover would boost Howden’s burgeoning reinsurance portfolio.

The deal propels HSCM total AuM and capital commitments to above $4bn.

Many hybrids, unless they are willing to take a meaningful financial hit to secure a divestiture, will have to stick with their reinsurance businesses through the current cycle.

The carrier also revealed $30mn in Russia-Ukraine Q1 losses.