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September 29, 2020

American Financial Group to offload Lloyd’s-based insurer Neon

American Financial Group (AFG) has marked its exit from the Lloyd’s of London marketplace through the divestiture of run-off Lloyd’s-based insurer Neon to RiverStone Holdings.

RiverStone UK managing director said: “We have worked closely and collaboratively with AFG to ensure that their strategic objectives are achieved through this transaction, and we will ensure that Neon insureds continue to receive the highest possible level of service.”

Transaction details

AFG will offload GAI Holding Bermuda and its subsidiaries, comprising the legal entities that own Neon.

Post deal completion in the final quarter of this year, AFG will release all of its funds at Lloyd’s (FAL). This includes the release of the letters of credit along with collateral pledge facility that AFG guarantees in support of Neon’s FAL.

AFG believes that the transaction will not have a material impact on its ongoing results of operations.

The deal, whose financial details were not divulged, awaits regulatory nod.

AFG will record the divestiture in the third quarter.

Commenting on the deal, AFG co-CEO Carl Lindner III said: “The exit allows us to provide continued focus on our other Specialty P&C businesses and enables us to redeploy capital, increase earnings and returns, and create long-term value for our shareholders.”

Cincinnati, Ohio-based AFG is an insurance holding company that managed around $70bn at the end of June 2020.

Through the operations of Great American Insurance Group, it mainly deals in property and casualty insurance.

It is also involved in the sale of traditional fixed and indexed annuities in the retail, financial institutions, broker-dealer, as well as RIA markets.

In 2018, AFG announced the acquisition of ABA Insurance Services from American Bankers Mutual Insurance.

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