Stalwart

Stalwart specialised in writing home income plans (“HIPs”) for the elderly. These provided customers with an annuity stream for life for which the company took a reversionary interest in the customer’s property. The business was in financial difficulties when Graphite invested, as a difficult property market and high interest rates had put a strain on the market in the early 1990s. However, Stalwart was developing a market-leading strategy for writing increased levels of HIP business using third party funding to leverage returns and preserve capital.

The innovative agreements were backed by significant reinsurance and allowed Stalwart to meet the capital-intensive nature of writing increased business without relying on shareholder funding. This transformed equity returns. The very large number of elderly people, who were capital-rich but income-poor, underpinned future market growth.