Canopius IPO: What to know about Canopius

Discover more about the Canopius IPO with background on the company’s journey so far and its strategy moving forward.

Charts (4)

What is Canopius?

Canopius is a Channel Islands-domiciled insurer and reinsurer and the fourth-largest syndicate member of global insurance market Lloyd’s of London. The company offers insurance in sectors such as energy, cyber and heavy industry, and reinsurance across sectors such as agriculture, marine and property.

The company was formed in 2003 via a £25 million management buyout (MBO) of an existing Lloyds company, secured with the assistance of private equity finance. It grew via organic expansion before being acquired in 2014 by Sompo Japan, a subsidiary of Japanese insurance giant NKSJ Holdings, for around £594 million.

In 2018 the company was taken over by a private equity consortium led by Centerbridge Partners for $952 million and in 2020 secured a $400 million capital raise led by Korean insurance provider Samsung Fire & Marine (SFMI).

Today, the company employs some 2000 people across five territories, with $1.5 billion in gross written premiums for 2019.

How does Canopius make money?

Like other insurance operators, Canopius makes money through underwriting revenues – or charging premiums for its insurance policies – the proceeds of which are invested for profit in financial markets.  

Is Canopius profitable?

Canopius recorded a post-tax profit of $66.9 million in its most recent 2019 financial report. This compares to a post-tax loss of $63.6 million in the 2018 period, which was caused mostly by substantial payouts following hurricanes Florence and Michael and the California wildfires, as well as the Lurssen shipyard fire which cost the business $19 million net.

Who are Canopius’s competitors?

Canopius’s competitors in the insurance and reinsurance space feature the likes of Kinsale Capital Group, Brit, Nassau and Liverpool Victoria (LV). Kinsale Capital Group, for example, has particular overlap with Canopius in insurance areas such as hard-to-place property, casualty and special risks. Other competitors in the banking space that also offer insurance include Eastern Bank and Coventry Building Society.

What is Canopius’s strategy?

Canopius centres its strategy around three geographical hubs: London, Asia-Pacific and the US. London remains the company’s operational base and its biggest market, and the company plans to use its location in the city to drive profitable growth, diversification and differentiation throughout its geographic hubs.  

The US opportunity will be explored through Canopius leveraging its partnership with SFMI by using the Korean investor’s admitted paper to underwrite more business across the Atlantic, but also continuing to explore its surplus lines (cover for higher risk).

Finally, the company’s Singapore base will be the focus for driving growth in the Asia-Pacific region based on increased profitability and broadened product offering. 

Who are the directors of Canopius?

Canopius has a number of key personnel that have helped progress the company to its expected IPO valuation. Here are some of them.

Position

Name

Chairman

Michael Watson

Chief Operating Officer

Laurie Davison

Chief Financial Officer

Nigel Meyer

Chief Actuary

Nick Betteridge

Group Chief Risk Officer

William Monelle

Marketing and Communications Manager

Lee Jones

When is the Canopius IPO?

The Canopius IPO does not currently have a specific date but is widely expected to take place later in 2021. In February, the company reportedly took on Goldman Sachs and Barclays to advise on the transaction. The valuation could be more than £2 billion, according to reports.

Check out some of the other high-profile IPOs set for 2021.

How much is Canopius worth?

Canopius is likely worth more than its $952 million takeover in 2018, and as mentioned might expect a valuation of some £2 billion based on speculation following announcement of its IPO plans. But since concretes financials for 2020 are not yet available, a clear valuation of the business at this point is hard to ascertain.

How to trade top stocks

You can trade stocks with City Index using spread bets or CFDs, with spreads from 0.1%. Follow these easy steps to start trading opportunities with stocks.

  • Open a City Index account, or log in if you’re already a customer.
  • Search for the company you want to trade in our award-winning platform
  • Choose your position and size, and your stop and limit levels
  • Place the trade

Build your confidence risk free

More from Equities

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.