Darag Group, the international legacy acquirer, has concluded a new agreement with an undisclosed captive insurance company.

The transaction structure was a novation of its 03-06 and 15/16 policy years with primarily workers’ compensation reserves, allowing the counterparty full legal finality with Darag facing the original fronting insurer.

The transaction value as at the reference date was approximately $30 million.

The transaction has been written into Darag Bermuda, which has a strong balance sheet and high solvency ratio having benefited from the recent commutation of a large commercial auto book.

Tom Booth, CEO of Darag Group, said: “We are pleased to have acted as a trusted partner for our client enabling them to focus on their core business and ongoing underwriting profitability.

“Darag has developed an excellent track record in this core niche of small to mid-sized captive and self-insured portfolios in North America.

“Our focus on underwriting discipline and risk management is central to our expansion. Our appetite to continue growth in this area is therefore stronger than ever.

“We expect to announce another similar sized transaction shortly and the pipeline for the remainder of the year is beyond expectations.”

He added: “Darag Bermuda is a core carrier for the group and now benefits from a well-diversified, mature and low volatility portfolio.

“I am delighted that we continue to have a wealth of attractive opportunities and the capacity to execute deals in our traditional area of focus.

“I look forward to the future of Darag Bermuda and the remainder of the group with confidence.”

Bermudian-based Joel Neal, executive vice president, M&A at Darag North America, added: “We are seeing a continued need for improved operational efficiency in the North American market.

“Transactions such as these enable our clients to achieve this, while simultaneously freeing up trapped capital. We look forward to announcing further transactions in the future.”