Premia Holdings has signed an agreement to acquire Bermuda-based P&C legacy reinsurer Armour Re through an all-share transaction.

Armour Re is a wholly-owned subsidiary of Armour Group, an Aquiline Capital Partners portfolio company.

As agreed, Premia will acquire Armour Re in two stages. In the first phase, Premia will assume certain service contracts and staff members and then, in the second part, it will acquire Armour in exchange for Premia shares.

Concurrently, Premia will secure a growth equity investment from an Aquiline-led investor group.

Premia CEO Bill O’Farrell said: “We are delighted to have reached an agreement with Armour and Aquiline. We believe this transaction is a major milestone for Premia to further consolidate its position as a leading legacy P&C reinsurer.

“The Armour acquisition accelerates the build out of our US and European operations. Premia is also excited to be partnering with Aquiline, one of the pre-eminent investors in the insurance sector. We look forward to welcoming the staff and our new shareholder into the Premia family.”

Aquiline chairman and CEO Jeff Greenberg said: “We are excited to partner with Bill and the Premia team, who we believe are best-in-class in the P&C legacy market. We are also excited to partner with Kelso and Arch who are well respected insurance industry investors.

“Our decision to invest in Premia reflects our belief that the P&C legacy sector will continue to be highly attractive.”

Last month, Premia Holdings expanded its reinsurance capacity by establishing a sidecar vehicle, named Elevation Re (SPC) Limited.