Esser hired the New York branch of investment bank Macquarie to explore a potential private equity interest in the company, which received the exploratory name of V Cap.
A source familiar with the process says discussions with investors are at an early stage, but that there is “a clear initial interest” due to the “new nature of the proposal and the critical importance of MGAs as as the entrepreneurial and innovative arm of specialized insurance ”.
The insurer understands that V Cap will seek to establish a financial strength rating of A-, widely regarded as the minimum bar for underwriting US and international business affairs. It will then seek to address the challenge that MGAs face to ensure long-term, reliable capacity by supplying top performing MGAs with paper across their facilities.
The magnitude of the potential increase is currently unclear, but it will likely exceed $ 200 million if V Cap wishes to receive an initial financial strength rating from AM Best.
The potential launch of the platform would mark a quick comeback for Esser following the shutdown of its independent broker Lloyd’s AFL, which it restructured before selling its existing business with team moves.
See the full version of this article in the first issue of #MonthReinsurance, which is published today at 2 p.m. BST / 3 p.m. CET through The insurer and is available for free download at www.theinsurer.com