At a glance
- The transfer is intended to give Clear Spring operational and economic finality on the discontinued portfolio, with RiverStone taking claims control and oversight of the existing third-party administrators.
- For allocators who fund run-off capacity, RiverStone is buying claims control without buying a claims operation: the existing third-party administrators stay in place under its oversight.
- The $325 million spans accident years 2018 through 2025, eight years that average roughly $41 million each.
RiverStone International agreed to assume about $325 million of net reserves from Clear Spring Property and Casualty in a loss portfolio transfer covering discontinued US workers' compensation business from accident years 2018 to 2025.
The transfer is intended to give Clear Spring operational and economic finality on the discontinued portfolio, with RiverStone taking claims control and oversight of the existing third-party administrators. Gallagher Re acted as sole adviser and broker on the transaction, announced Nov. 5.
For allocators who fund run-off capacity, RiverStone is buying claims control without buying a claims operation: the existing third-party administrators stay in place under its oversight. The result therefore rests on how those administrators perform rather than on a claims platform RiverStone builds itself.
The $325 million spans accident years 2018 through 2025, eight years that average roughly $41 million each. Reserves are unlikely to be spread evenly across them, so that average is a scale marker rather than a schedule.
Paul Brockman, group chief executive of RiverStone International, said: "This transaction reflects RiverStone's disciplined approach to acquiring legacy portfolios where our specialist claims capabilities can create value for all stakeholders." He said the portfolio is well aligned with the company's experience in US workers' compensation and that RiverStone looks forward to working with Clear Spring and its claims partners on an orderly transition.
Jim Purvis, Clear Spring's chief executive, said the agreement is an important step in the company's strategy to focus resources on its core markets, and described RiverStone as a strong partner for long-term management of the portfolio.
RiverStone describes itself as an acquirer and reinsurer of legacy and discontinued insurance business, with operations in Bermuda, the Lloyd's of London market, the US and Europe. Deal Tracker records one RiverStone purchase announced in the past 12 months, dated Aug. 14. The transaction remains subject to customary closing conditions and applicable regulatory approvals.
This transaction reflects RiverStone's disciplined approach to acquiring legacy portfolios where our specialist claims capabilities can create value for all stakeholders.Paul Brockman, group chief executive of RiverStone International
Reported by the Cat bonds & reinsurance desk from Royal Gazette Bermuda Re and Deal Tracker. Published . Corrections