Bermuda's Maiden takes stake in Tattan's IRC
Insurance Regulatory Capital, the debt capital provider established by Irish entrepreneur Oliver Tattan, is gearing up for a rapid expansion of its business.
And Bermuda-based reinsurance group Maiden Holdings has taken a stake in the firm, the Irish Independent has learned.
Mr Tattan confirmed that Maiden Holdings, which is quoted on the stock market in New York and has a $1bn market capitalisation, has taken a stake but declined to say how much of Insurance Regulatory Capital (IRC) it now owns.
However, it's understood that Maiden has invested €2m in the Irish firm. IRC was established by Mr Tattan about three years ago but the business really only got under way last year.
It aims to be a provider of subordinated debt to mid-sized insurance firms, providing capital to enhance their solvency cover.
It aims to capitalise on opportunities that have emerged as a result of new European Union solvency rules, known as the Solvency II Directive. The directive comes into effect next year and means insurers must set aside more money to meet potential claims.
Mr Tattan, a former VHI boss, founded health insurance firms Vivas and GloHealth.
He personally made an estimated €10m from the sale of Vivas to Aviva in 2008. He's also behind the OneBigSwitch campaign in Ireland.
He told the Irish Independent that IRC is close to finalising two tranches of subordinated debt funding to new clients. They'll be the first deals concluded by IRC.
Mr Tattan said that IRC will typically provide between €5m and €50m in subordinated debt to clients.
The funds are provided by Maiden Holdings, whom Mr Tattan described as an "anchor investor".
IRC can provide mid-sized insurers with a "continuum of capital", he added. He said it's likely that other investors will be sought by IRC in the future.
IRC has so far talked to about 60 insurance firms in Europe with a demand for up to €1bn in funding.
Mr Tattan said there are about 600 possible clients in Europe and up to 1,800 worldwide.
"This is a global play. We see this as a product that we would like to sell into the US and the rest of the world," he said. "It's a great example of financial innovation coming out of Ireland."
Apart from Mr Tattan and Maiden, shareholders in IRC include Stephen Loughman, a former finance director at Vivas, and Enterprise Ireland.