Bishop Street closes in on Ethos TL deal with support from Skyward and Topsail Re

Bishop Street Underwriters is close to agreeing a clean lift of the circa $140mn-premium Ethos Specialty transactional liability (TL) business from Ascot, with the Navine Aggarwal-led team expected to hold a meaningful equity position in the unit, Program Manager understands.

Sources said the RedBird Capital Partners-backed start-up, led by Chad Levine and Chad Weber, is expected to pay a price well below $100mn for the TL business. This publication has previously reported that premium in the $140mn range could equate to Ebitda in the low $20mns.

It is understood that although there were other offers on the table, the Bishop Street proposal was favored because it came with access to capacity.

It is thought that Ascot had made it clear it wanted a clean exit from the Dthos TL business – including as a capacity provider – after the rest of the Ethos Specialty portfolio of programs was sold to Ryan Specialty in a move announced in early September.

As previously reported, Bishop Street – described as a multi-boutique insurance platform – has entered into partnerships with both Skyward Specialty and Topsail Re since its launch last year.

Details of the potential post-deal capacity line-up have not been confirmed, but sources said it is expected that Skyward Specialty would be joined by some of the TL program’s current carrier partners.

They are thought to include a number of Lloyd’s participants as well as Palms Insurance.

It is expected that Topsail Re would provide capacity as a reinsurer.

As previously reported, Bishop Street secured an investment from Topsail Re in March as part of what was described at the time as a joint venture between the companies that would see the reinsurer provide preferred capacity.

And last month it was announced that the start-up has also established a strategic joint venture with Skyward Specialty to support existing program expansion and new launches.

At the time, Bishop Street said the partnership would enhance its ability to support existing program expansion and new product and program launches, as well as underwriting team lift-outs with preferred admitted and E&S capacity.

Other moves by Bishop Street in recent months include a strategic equity investment in full-service auto insurance MGA Verve Services.

Also in September, the start-up inked a deal to buy Conifer Insurance Services, a transaction that marked its entry into the commercial lines segment.

Confirmation of that deal came after this publication revealed that the acquisition was understood to be imminent.

TL left out of Ryan Specialty deal

As previously reported, Ryan Specialty agreed to buy Ethos Specialty’s P&C MGUs from Ascot, with the exception of the platform’s TL business, in a move first revealed by this publication.

The TL book was the largest in the portfolio of programs and was viewed as its jewel in the crown when it initially emerged that Ascot and its owner CPP Investments were working with Evercore on a sale process for Ethos.

As final negotiations were taking place with Ryan Specialty, this publication revealed that Aggarwal was set to leave the business ahead of the proposed sale, with an exit package agreed for his departure.

However, with the subsequent decision to not include the TL business in the Ryan Specialty transaction, former Ironshore and Allied World underwriting executive Aggarwal will now lead the TL team as a transaction nears for the business to move to Bishop Street.

The potential sale comes at a time when there is optimism that IPO and other activity driving the TL business will pick up pace.

Bishop Street and Ascot declined to comment on this article.