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Fundamental Global Is Driving The Acceleration of FG Re As Its Capacity Expands

Fundamental Global Inc., resulting from the merger of FG Financial Group, Inc. and FG Group Holdings Inc., is poised to drive growth in its reinsurance business, FG Reinsurance (FG Re).

Kyle Cerminara, CEO of the newly formed Fundamental Global company, and Tom Heise, CEO of FG Reinsurance, Ltd., foresee substantial expansion in the reinsurance sector.

As previously reported on the merger announcement, the combined entity will possess assets totaling over $110 million and achieve an annual revenue exceeding $65 million. Additionally, expense savings are anticipated to surpass $3 million in the first year post-merger, with further savings targeted in the subsequent 12-24 months.

FG Reinsurance Ltd. (FG Re) operates as a Cayman Island Class B (iii) Insurer, specializing in underwriting opportunistic collateralized and loss-capped reinsurance opportunities. Engaging in the global reinsurance market through the Funds at Lloyd’s approach, FG Re writes traditional reinsurance contracts and industry-loss warranties (ILWs).

Following the merger, concerted efforts will be directed toward expanding the FG Re reinsurance business. Cerminara and Heise conveyed to Reinsurance News their belief in the opportune timing of this strategic move.

Cerminara asserted, “By merging our two companies, we can expedite FG Re’s strategy to align our capital with desirable risk in a challenging reinsurance market.” Heise expressed satisfaction with the transaction, noting the immediate capacity increase that allows for deeper participation in the reinsurance market and brings additional scale to the business.

The increased capacity comes at an advantageous juncture, with reinsurance rates remaining high and capacity constrained in specific market segments. This indicates continued profitability in underwriting opportunities, contingent upon loss activity, and offers avenues for margin and growth for FG Re.

Cerminara further emphasized, “This transaction positively impacts each of our three drivers of profit – underwriting, fee, and investment income. We believe this transaction will create both immediate and long-term value for our shareholders.”