By Ryan Hewlett, Aidan Gregory

Jan 14 - (The Insurer) - Blackstone has made several large bets on P&C insurance on both sides of the Atlantic since 2018, with the US alternative asset manager’s backing of AIG’s new Lloyd’s Syndicate 2478 the latest in a series of investments in the space, according to analysis by The Insurer.

• Blackstone unveiled as AIG Syndicate 2478 backer last year

• 2024 an active year for Blackstone P&C transactions

• Previous deals include Fidelis, Westland, Sunz and Resolution

• Blackstone private credit and insurance AUM = $354.7bn as of Q3 2024

The New York-based investment manager has increasingly focused on the insurance sector in recent years, leveraging strategic investments and partnerships to grow its presence in the space.

In late 2024, Blackstone's credit and insurance division emerged as the firm's largest unit, overseeing $354.7bn in assets, with the segment's growth reflecting a broader market trend whereby non-bank lenders have gained prominence amid higher interest rates and reduced activity from traditional banks.

With private credit and insurance now accounting for more than the Blackstone’s private equity assets, executives told analysts last year that it expects continued momentum across the sector with growth fuelled by collaborations with insurers and growing interest from institutional clients, including pension funds and sovereign wealth entities.

Unlike some private equity peers that seek to integrate with the insurers they acquire, Blackstone focuses on minority investments and asset management agreements. This approach allows the firm to expand its reach in the insurance sector without assuming extensive operational involvement or exposure to claims on its own balance sheet.

Most recently the asset manager was unveiled in December as the third-party capital provider for AIG’s reinsurance Syndicate 2478. The syndicate formally began underwriting from 1 January 2025.

As first revealed by The Insurer, the syndicate, which is managed by Talbot Underwriting, has approved stamp capacity of $715mn for the 2025 year of account with funds managed by Blackstone through Lloyd’s London Bridge 2 PCC structure.

AIG and the asset management and investment giant have a long history of collaboration.

In July 2021, AIG sold a 9.9 percent stake in its life and retirement business, which is now known as Corebridge, to Blackstone for $2.2bn This deal included a long-term asset management agreement, positioning Blackstone to manage a significant portion of AIG's life and retirement portfolio.

More recently, Blackstone bought $3.6bn of collateralised loan obligation $(CLO.UK)$ assets from AIG. This acquisition made Blackstone the world's largest manager of CLOs.

AIG and Blackstone’s relationship goes back more than two decades and includes a 1998 agreement under which the insurer made a long-term investment in the asset manager and its funds valued at approximately $1.3bn.

The Syndicate 2378 seeding was the latest in a series of P&C insurance transactions by Blackstone last year, suggesting that the alternative asset manager remains bullish on the sector in 2025.

As previously reported, Blackstone also led the Fidelis Partnership’s $2bn refinancing in September. The deal, which saw a significant portion of funds allocated to a dividend payout to Fidelis investors, provided funding for further regional growth in the Middle East, Africa, Asia and Latin America, alongside the expansion of the Pine Walk MGA platform and Syndicate 3123.

Blackstone previously backed the creation of Bermuda-based Fidelis MGU as part of the Fidelis Group’s bifurcation deal.

Elsewhere, Blackstone has previously participated in funding rounds by Canadian independent broker Westland and Florida-based Sunz Insurance. In November 2018, US insurance broker Acrisure received $2bn of funding from a consortium of investors that included Blackstone.

Blackstone has also indicated risk appetite for the sector via its participation in catastrophe bond issues.

In July 2023, Swiss Re structured and placed a $250mn indemnity catastrophe bond via Wrigley Re, a Bermuda-registered special purpose vehicle, on behalf of Blackstone captive Gryphon Mutual Property Americas to cover Blackstone’s real estate funds.

Not all of Blackstone’s involvement with P&C insurers has led to successful deals. The proposed sale of specialty insurer Ascot Group to Blackstone collapsed in November 2022.

In May last year, Bermudan insurer Hamilton bought back shares from Blackstone for $100mn, around 21 percent below the market price of Hamilton’s shares at the time. Blackstone exited Hamilton following the transaction after over a decade of involvement with the company.

Similarly, Bermudian Aspen was revealed by this publication to be in discussions with Ryan Specialty and Blackstone over a transaction that would separate out its open market underwriting operations into a new MGA and refocus its remaining insurance operation as a program specialty carrier. While a transaction has failed to emerge, a deal would mark a reunion between the two parties, as Blackstone was the principal founding shareholder when Aspen launched in the wake of the terrorist attacks on 9/11.

The discussions with Aspen and Ryan Specialty marked Blackstone’s latest attempt to forestall a potential Aspen listing, after it previously made overtures to buy the company outright.

Outside P&C, Blackstone in October 2022 signed a partnership deal to manage certain investments for Resolution Life and agreed to invest $500mn in the life insurer.

The deal, similar to that penned in 2021 for AIG’s life and retirement business, followed a similar partnership with annuities and life insurance provider F&G, a unit of Fidelity National Financial Inc.

Blackstone declined comment.