Darag Insurance Guernsey Ltd, the international legacy acquirer with operations in Bermuda, has agreed to acquire a Cayman Island-based insurance and reinsurance captive.

The company said the sale and purchase agreement is subject to regulatory approval from the Cayman Islands Monetary Authority and continues Darag’s strong track record in executing captive transactions.

DIGL intends to merge with the acquired captive in due course and reinsure the longer tail portion of the portfolio to its core risk carrier in Germany, Darag Deutschland AG.

The captive, acquired from a very large multinational corporate, possesses long tail UK employers’ liability exposure and is one of the larger transactions completed by Darag in the captive space, the company said.

Tom Booth, CEO of Darag, said: “This transaction is further evidence of Darag’s dominance in the captive legacy space as well as its continued interest in acquiring and managing UK EL exposure. The group is confident, given the advanced nature of a number of other attractive opportunities in its core European market, that 2024 will deliver excellent growth.

“We look to the future with increasing confidence as demand for our legacy solutions is plentiful, investment yields and capital efficiency continue at attractive levels and competition at the small to mid-sized end of the legacy market reduces.

“Darag’s focused and well-capitalised business, helped by its newly simplified structure, is particularly well placed to take advantage of these much improved market conditions.”