Radian Group has recently announced an important decision to expand its operations by entering into a definitive agreement to purchase Inigo Limited, a successful specialty insurer operating in the Lloyd’s market. This acquisition is valued at $1.7 billion and will primarily be conducted through cash transactions. The financial resources for this deal will come from Radian’s existing liquidity and excess capital available from its subsidiaries.
This move represents a significant change for Radian Group, which has long been known as a leading mortgage insurer in the United States. With this acquisition, Radian aims to transition into a global and diversified multi-line specialty insurer. This transformation will not only enhance the company’s range of insurance products but also improve its overall capabilities in the industry. By integrating Inigo into its operations, Radian is looking to make better use of its excess capital and tap into new opportunities in the market.
Inigo Limited is expected to play a crucial role in Radian’s growth strategy. The acquisition values Inigo at 1.5 times its projected tangible equity by the end of 2025, which indicates a strong belief in the profitability potential of the company. Analysts project that this acquisition will significantly boost Radian’s earnings per share by mid-teens percentages and increase the return on equity by around 200 basis points in the first full year after the deal is finalized. Furthermore, Radian is optimistic that this transaction will result in a doubling of its total annual revenue, providing more flexibility to allocate capital across different insurance sectors during various economic cycles.
Inigo was established in 2021 by a skilled leadership team known for their extensive experience within the Lloyd’s insurance market. This team includes professionals who have held senior positions at larger Lloyd’s insurers. Since its inception, Inigo has quickly become one of the fastest-growing syndicates in the Lloyd’s market, achieving impressive profitability and recognition for its innovative approach to specialty insurance. The company focuses on providing data-driven insurance solutions and has built a strong reputation for excellent underwriting performance, catering to some of the largest commercial and industrial enterprises worldwide.
Leadership will remain consistent at Inigo following the acquisition, with Richard Watson serving as the Chief Executive Officer. Other key figures, including Russell Merrett as Chief Underwriting Officer and Stuart Bridges as Chief Financial Officer, will also continue to manage the company. Their proven expertise and the dynamic, entrepreneurial spirit of the Inigo management team are expected to drive the company’s continued success in the specialty insurance landscape.
Advisors: Goldman Sachs and Guy Carpenter’s Capital & Advisory team acted as financial advisors and Skadden, Arps, Slate, Meagher & Flom acted as legal counsel to Radian for the Inigo transaction. RBC Capital Markets also provided advice on some issues.
KEY QUOTES:
“Today’s announcement of the acquisition of Inigo marks an important milestone for Radian as we transform our business model from a leading U.S. mortgage insurer into a global, multi-line specialty insurer. This is a financially compelling transaction, funded entirely from our excess capital and available liquidity sources without issuing new equity. By bringing together Inigo’s strong performance with our capital strength, we are diversifying beyond our traditional mortgage insurance market and expanding into the large and attractive Lloyd’s global specialty market. Most importantly, we are excited to partner with the talented Inigo team, fueled by a shared commitment toward innovation, underwriting expertise, data science, technology and workplace culture. Together, we are well positioned to deliver even greater value to our combined stakeholders.”
Rick Thornberry, Chief Executive Officer of Radian
“We are delighted to have found Radian. From our first meeting, there was a clear cultural match and a shared conviction around the importance of data, and how we can use it to benefit the customers we serve. Our respective portfolios are very complementary, with no business overlaps. As we build bigger and deeper relationships with our customers, we welcome the further diversification and access to the stronger capital base that Radian provides.”
Richard Watson, Chief Executive Officer of Inigo
