Canopius IPO: What to know about Canopius

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By :  ,  Financial Writer

What is Canopius?

Canopius is a Channel Islands-domiciled insurer and reinsurer and the fourth-largest syndicate member of global insurance market Lloyd’s of London. The company offers insurance in sectors such as energy, cyber and heavy industry, and reinsurance across sectors such as agriculture, marine and property.

The company was formed in 2003 via a £25 million management buyout (MBO) of an existing Lloyds company, secured with the assistance of private equity finance. It grew via organic expansion before being acquired in 2014 by Sompo Japan, a subsidiary of Japanese insurance giant NKSJ Holdings, for around £594 million.

In 2018 the company was taken over by a private equity consortium led by Centerbridge Partners for $952 million and in 2020 secured a $400 million capital raise led by Korean insurance provider Samsung Fire & Marine (SFMI).

Today, the company employs some 2000 people across five territories, with $1.5 billion in gross written premiums for 2019.

How does Canopius make money?

Like other insurance operators, Canopius makes money through underwriting revenues – or charging premiums for its insurance policies – the proceeds of which are invested for profit in financial markets.  

Is Canopius profitable?

Canopius recorded a post-tax profit of $66.9 million in its most recent 2019 financial report. This compares to a post-tax loss of $63.6 million in the 2018 period, which was caused mostly by substantial payouts following hurricanes Florence and Michael and the California wildfires, as well as the Lurssen shipyard fire which cost the business $19 million net.

Who are Canopius’s competitors?

Canopius’s competitors in the insurance and reinsurance space feature the likes of Kinsale Capital Group, Brit, Nassau and Liverpool Victoria (LV). Kinsale Capital Group, for example, has particular overlap with Canopius in insurance areas such as hard-to-place property, casualty and special risks. Other competitors in the banking space that also offer insurance include Eastern Bank and Coventry Building Society.

What is Canopius’s strategy?

Canopius centres its strategy around three geographical hubs: London, Asia-Pacific and the US. London remains the company’s operational base and its biggest market, and the company plans to use its location in the city to drive profitable growth, diversification and differentiation throughout its geographic hubs.  

The US opportunity will be explored through Canopius leveraging its partnership with SFMI by using the Korean investor’s admitted paper to underwrite more business across the Atlantic, but also continuing to explore its surplus lines (cover for higher risk).

Finally, the company’s Singapore base will be the focus for driving growth in the Asia-Pacific region based on increased profitability and broadened product offering. 

Who are the directors of Canopius?

Canopius has a number of key personnel that have helped progress the company to its expected IPO valuation. Here are some of them.

Position

Name

Chairman

Michael Watson

Chief Operating Officer

Laurie Davison

Chief Financial Officer

Nigel Meyer

Chief Actuary

Nick Betteridge

Group Chief Risk Officer

William Monelle

Marketing and Communications Manager

Lee Jones

When is the Canopius IPO?

The Canopius IPO does not currently have a specific date but is widely expected to take place later in 2021. In February, the company reportedly took on Goldman Sachs and Barclays to advise on the transaction. The valuation could be more than £2 billion, according to reports.

Check out some of the other high-profile IPOs set for 2021.

How much is Canopius worth?

Canopius is likely worth more than its $952 million takeover in 2018, and as mentioned might expect a valuation of some £2 billion based on speculation following announcement of its IPO plans. But since concretes financials for 2020 are not yet available, a clear valuation of the business at this point is hard to ascertain.

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