• Investment Year:2014
  • Status:Current
  • Stage:
  • HQ:Bermuda

Sector(s)

StarStone

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StarStone is a specialty insurance company with operations in Europe, the U.S., Bermuda and London (Lloyd’s).

StarStone Insurance Holdings is the holding company of six wholly owned insurance vehicles, including one Lloyd’s syndicate. Through its European, U.S. and Bermuda insurance subsidiaries, StarStone offers a diversified range of property, casualty and specialty insurance and reinsurance products to a global client base. StarStone was founded in 2008 and produced over $200 million of losses in its first six years of operations and was close to losing its A- A.M. Best rating. In April 2014, Enstar Group, Stone Point, and Dowling Capital Partners, acquired StarStone and implemented a substantial turn-around plan.

INDUSTRY KNOWLEDGE & NETWORK

Investing in StarStone was derived from (i) Stone Point’s long-standing P&C Insurance elephant and (ii) its extensive relationship with Enstar Group, which it partnered with to acquire StarStone. Stone Point utilized its significant experience working with A.M. Best, the industry credit rating agency, to help StarStone emerge from the negative rating outlook A.M. Best had ascribed to StarStone prior to the acquisition in 2014.

BUSINESS & PRODUCT DEVELOPMENT

Stone Point helped introduce StarStone to potential new business sources through broker and MGA relationships such as U.S. aviation and areas of workers compensation. Stone Point also advised on the reduction of certain lines of less profitable business.

EXECUTIVE RECRUITING & ALIGNMENT

Stone Point helped recruit a new leadership team for StarStone that turned around the business. The initial leadership team included Nick Packer as CEO (Enstar’s former Joint COO), John Shettle (Stone Point Operating Partner) as Chief Underwriting Officer, and Norman Brown as CEO of StarStone U.S.

OPERATIONAL ASSISTANCE & GOVERNANCE

Stone Point helped to reposition the business to focus on the core, profitable specialty insurance lines. We worked with StarStone management to improve profitability through expense reductions and operating efficiencies, and integrated new business from renewals of run-off blocks acquired by Enstar. John Shettle and Stone Point helped StarStone to improve its reinsurance panel to increase profitability and enhance the return on the reinsurance spend. John Shettle and Stone Point helped StarStone to alter its underwriting guidelines to ensure the company wrote business that generated profitability on a risk adjusted basis.

Investments highlighted or discussed in this selection have been selected to illustrate SPC’s investment approach and/or market outlook and are not intended to be an indicator of past or future performance. Each investment discussed in this selection has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria. The investments discussed herein do not represent an entire portfolio and in the aggregate may only represent a small percentage of holdings. Nothing in this presentation shall constitute a recommendation or endorsement to buy or sell any security or other financial instrument referenced herein.