Venture Capital Firm, Beat Capital, to Merge with Insurer Investment Vehicle Paraline UK

August 23, 2018 by

Venture capital firm Beat Capital Partners and insurance investment vehicle Paraline UK announced they plan to merge – in a move that is designed “to enhance and further build Beat’s platform to support independent underwriting businesses.”

As a result of this merger, Paraline Group, a Bermuda-based insurance and reinsurance holding company, will join Neon Holdings Ltd., as a strategic investment partner of Beat. After the merger, which is subject to regulatory approval, Paraline’s Syndicate 4242 will be renamed Beat Syndicate 4242.

This merger provides Beat with a secondary Lloyd’s platform, in addition to Neon’s Lloyd’s business, which was a founder investor in Beat, explained a Beat spokesman.

Beat is a venture capital investor that backs insurance industry businesses by providing infrastructure, risk capital, “A+” rated paper as well as guidance and support, according to the press release announcing the merger. American Financial Group Inc. is another investor in Beat. Beat also has investments in Tarian, a cyber insurance specialist, and Chord Re, a specialty reinsurance underwriter.

Paraline’s Syndicate 4242, which has £110 million (US$142 million) of capacity, is managed by Asta, the third party managing agency at Lloyd’s.

Neon Syndicate 2468 leads underwriting support for both facilities. ICAT Managers, a managing general agent that underwrites property catastrophe insurance for businesses and homeowners across the U.S., will continue its longstanding strategic underwriting relationship with Syndicate 4242. (Paraline was the former owner of ICAT, which was sold last year to Victor, formerly known as The Schinnerer Group.)

Bruce Schnitzer and John Struck of Paraline will join the Beat board of directors, which will be chaired by John Cavanagh, who is currently non executive director of Beat. Paul Rayner, active underwriter of Syndicate 4242 and a director of Paraline Group, will also become chief financial officer of Beat.

“Beat has grown rapidly since its formation in 2017. This deal gives us access to a second Lloyd’s platform alongside Neon 2468 that benefits our existing investee companies and enhances our offering to proven lead underwriters who have the ambition to build their own business,” commented Beat co-founder Tom Milligan. “We are delighted to partner with Paraline, who have a track record of successful insurance investment.”

Bruce Schnitzer, chairman of Paraline Group, said: “This transaction is a great move for our business. It brings together a talented group of established insurance leaders and a powerful shareholder group with a shared, long-term vision.”

Martin Reith, group CEO of Neon: “As a founder investor in Beat, we are thrilled to be partnering with Paraline Group in the next stage of Beat’s evolution.”

Established in August 2010, Paraline Group’s principal operating businesses are Asta Capital Limited and Paraline Re, a Bermuda-based reinsurer. Asta Capital, a third party managing agent at Lloyd’s, manages over £1 billion ($1.3 billion) of underwriting capital including Paraline’s Syndicate 4242. Paraline Re provides aligned underwriting capital to Syndicate 4242. Paraline is owned by private investors that include Wand Partners Inc. and funds advised by Elliott Management Corp.

Sources: Beat Capital Partners/Paraline Group/Neon