Mark Riciardelli, CEO of the Bermudian run-off insurer Alea, has quit to pursue other interests. Mark Cloutier will become group president and CEO when Riciardelli steps down on Aug. 31. Riciardelli joined the company as CEO on June 25, 2004.
“Riciardelli joined as CEO while Alea was an ongoing concern and now it’s gone into run-off there is a need to save costs and scale down the management,” says Nick Johnson, equity analyst at Numis Securities. “This is not a shock whatsoever.”
New CEO Cloutier has 30 years of experience in the reinsurance and run-off markets. He previously served as CEO and president of OP Re, the reinsurance arm of Overseas Partners, and was credited with the successful and orderly run-off of that company. Cloutier was also appointed chief claims officer for Quanta Capital Holdings in April 2005. “It’s logical that Riciardelli should go and be replaced by someone with more experience of putting a company into run-off,” says Johnson.
Alea spokesperson Sheel Sawhney told Reactions that Cloutier would be concentrating on pursuing an effective run-off strategy and preserving value for the company’s shareholders. He will be supported by Kirk Lusk, who continues as chief operating officer and CFO of the company. At an annual general meeting on June 29, shareholders also ratified Lusk and Cloutier as executive directors of the company, effective Sept. 1.
Ricciardelli said in a statement: “Management’s primary focus is on executing the run-off strategy; however, we continue to explore sale options for all or certain parts of the group. There can be no guarantee that any transaction will take place or that a sale of the group would be at a premium to the current market price. The conversion of the organization from a going concern to run-off is now materially complete. Alea’s run-off plan is on track, as commutations, headcount and expenses are running as expected.”
In December 2005, Alea sold the renewal rights to its European property/casualty treaty business to French reinsurer Scor. In the same month it sold the renewal rights to its U.S. excess and surplus lines unit, Alea North American Specialty Insurance, to U.S. financial services specialist AmTrust for US$12 million. This unit was bought in May by newly formed U.S. specialty writer Praetorian Financial, a unit of German reinsurer Hannover Re. Those units remaining on the block comprise Alea Europe’s reinsurance operations in Switzerland and the U.K. Sawhney declined to say whether prospective buyers of these units had made any approaches.
Alea intends to publish its interim results the week beginning Sept. 18.