AIG withdraws from surety market globally
AIG withdraws from surety market globally Read More »
M&A
Intact Financial Corporation to acquire leading specialty insurer The Guarantee Company of North America and Frank Cowan Company Limited
Bolsters Intact’s leadership position in Canada Brings Intact’s North American specialty lines platform close to its $3 billion annual Direct Premiums Written objective Adds attractive surety business and expertise on both sides of the border Enhances specialty lines with public entity capabilities and adds an MGA to the platform Expands Intact’s personal lines offering in Canada with high net worth products Delivers a return on capital above Intact’s threshold and immediate accretion to NOIPS Strong financial position maintained, with over $1 billion of capital margin after closing TORONTO , Aug. 15, 2019 /CNW/ – Intact Financial Corporation (IFC.TO) (“Intact” or the “Company”) announced today that it has entered into a definitive agreement with Princeton Holdings Limited (“Princeton Holdings”) to acquire The Guarantee Company of North America (“The Guarantee”), a specialty lines insurer in Canada and the U.S., and Frank Cowan Company Limited (“Frank Cowan”), a managing general agent (“MGA”) focused on specialty insurance for a cash consideration of approximately $1 billion . The transaction is expected to close in the fourth quarter of 2019, subject to regulatory approvals. In Canada , the acquisition bolsters Intact’s position and adds new products for the high net worth customer segment. It meaningfully advances Intact’s North American specialty lines platform solidifying prominent positions in public entity and surety. The transaction will also contribute to additional distribution-related earnings. The Guarantee is a Canadian-owned insurance company with customers in Canada and the U.S. Two-thirds of its business is specialty lines and surety and one-third personal lines including a high net worth home and auto insurance portfolio in Canada . It adds more than $560 million in Gross Premiums Written1, including over $100 million in the U.S., bringing Intact’s annual North American specialty lines Direct Premiums Written close to $3 billion 2. Frank Cowan Company Limited is an MGA that is a leader in providing specialized insurance programs to public entities across Canada . It offers coverage placement, risk management consultation, and claims services for municipalities, healthcare, education, community, children’s and social service organizations. Frank Cowan places business with several insurers including The Guarantee. Princeton Holdings will continue to retain full ownership of its other businesses: Cowan Insurance Group, Cowan Asset Management, and Fountain Street Finance. “The acquisition of The Guarantee Company of North America and Frank Cowan Company is strongly aligned with our strategic and financial objectives,” said Charles Brindamour , Chief Executive Officer, Intact Financial Corporation. “We are delivering on our objectives to grow in Canada and build a leading North American specialty platform. I’m enthusiastic about what we will accomplish by leveraging the combined expertise of our teams and our expanded offering.” The transaction is expected to deliver strong economics for Intact through loss ratio improvements, expense savings, and optimization of reinsurance and capital. In addition, the combined platform offers top-line expansion opportunities. “The Guarantee Company of North America and Frank Cowan Company have built a strong customer-focused specialty and personal lines business over almost 150 years, of which we are very proud. After careful consideration, we believe that combining our strong customer focus and the expertise of our employees in specialty lines and surety, with Intact’s resources, in particular its advanced analytics capabilities, provides tremendous opportunities for the combined entities to leverage one another’s strengths to build an outstanding, Canadian owned, North American specialty insurer,” said Maureen Cowan , Chairman of the Board, Princeton Holdings Limited. Intact expects the acquisition to generate a return on capital above its threshold and expects the acquisition to be immediately accretive to net operating income per share (“NOIPS”) with low single-digit NOIPS accretion within 24 months after close. To finance the transaction, Intact has access to its own capital resources and bank facilities and may evaluate capital markets alternatives. Intact will maintain a strong capital position at closing with an estimated capital margin above $1 billion , estimated MCT at 195% and a debt to total capital ratio below 25%. The debt to capital ratio is expected to return below the target level of 20% within 24 months following closing of the acquisition. https://finance.yahoo.com/news/intact-financial-corporation-acquire-leading-153800063.html
Liberty Mutual Insurance Announces Agreement To Acquire The Domestic And International Surety And Credit Reinsurance Operations Of AmTrust
BOSTON, April 15, 2019 /PRNewswire/ — Liberty Mutual Insurance announced today it has signed a definitive agreement to acquire the global surety and credit reinsurance operations of AmTrust Financial Services, Inc. (AmTrust), a multinational property and casualty insurer specializing in coverage for small to midsized businesses. Upon closing, Liberty Mutual will acquire four AmTrust businesses: AmTrust Surety, previously managed by Insco Dico, which provides contract, commercial, and subdivision bonds primarily in the Western U.S. AmTrust Insurance Spain which offers surety bonds in Spain and Latin America Nationale Borg which provides surety, worker disability, and home purchase bonds in the Netherlands and Belgium. Nationale Borg Reinsurance (NBRe), a global provider of surety, trade credit and political risk reinsurance. The AmTrust Surety portion of the acquisition is expected to close in Q2 of 2019, and the AmTrust Insurance Spain, Nationale Borg, and NBRe portion is expected to close in the second half of 2019, subject to regulatory approvals and customary closing conditions. Terms of the deal were not disclosed. “The transaction will further enhance our strong global surety and reinsurance expertise, market leadership, and geographic footprint,” notes Dennis Langwell, President, Global Risk Solutions, Liberty Mutual, which offers a broad range of primary, excess, specialty, and reinsurance products in the U.S. and globally. ”Once the transaction closes, we’ll integrate the acquired operations into our current structure.” The agreement reinforces Liberty Mutual’s global surety market position. ”We believe this transaction will strengthen our best-in-class operation, allowing us to better serve our valued agents, brokers, and customers,” notes Tim Mikolajewski, President, Global Surety. ”The added scale and key talent aligns well with our model and goals in the U.S., and will provide a platform for broader global development through AmTrust Insurance Spain, Nationale Borg, and Nationale Borg Reinsurance.” The agreement is an important step in the AmTrust Forward strategic plan to position the company for long-term success. ”Earlier this year, we announced our plan to become a leading specialty commercial P&C insurer by focusing on local markets and niche products where we can add significant value,” said Barry Zyskind, Chairman and CEO of AmTrust. “The agreement with Liberty Mutual enables us to focus our resources in areas where we can differentiate ourselves through the value we bring to distribution partners and buyers. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Liberty Mutual Insurance in the transaction. Bank of America Merrill Lynch served as financial advisor to AmTrust in connection with the transaction, and Debevoise & Plimpton LLP was legal counsel. https://insurancenewsnet.com/oarticle/liberty-mutual-insurance%E2%80%AFannounces-agreement-to-acquire-the-domestic-and-international-surety-and-credit-reinsurance-operations-of%E2%80%AFamtrust#.XLeDeOhKiUk
Coface strengthens its market position in the Adriatic region by acquiring SID – PKZ, the leading credit insurance company in Slovenia
Coface strengthens its market position in the Adriatic region by acquiring SID – PKZ, the leading credit insurance company in Slovenia Coface announces today the acquisition of SID – PKZ, the market leader in credit insurance in Slovenia with a high market share. As Coface has acquired all SID – PKZ shares, the business will operate under the new brand name Coface PKZ. The acquisition supports Coface’s strategy of profitable growth in Central & Eastern Europe region. Founded by SID Bank in 2005, SID – PKZ recorded EUR 14.3 m of gross written premium in 2018. The transaction will have a neutral impact on Coface’s solvency ratio. With this strategic step, Coface strengthens its market position in the Adriatic region. Offering a broad range of services and a vast international network, Coface will enhance the support of Slovenian exporters thus adding value to its clients and contributing to the economic development of the country. Coface PKZ will be integrated into the Central and Eastern Europe region under the leadership of regional CEO Declan Daly. Xavier Durand, CEO of Coface added: “The acquisition of SID – PKZ marks the first external growth initiative of Coface in more than 10 years. It will reinforce our presence in this important part of the world and it is perfectly in line with the objectives of our Fit to Win strategic plan. Through this acquisition, Coface is proud to contribute to enhancing the Slovenian Economy and excited to welcome a very experienced and highly recognised team of 74 experts from SID – PKZ.” At the conclusion of the sales process, Sibil Silvan, President of the Board of SID Bank, stated: We believe that the new strategic owner of SID – PKZ can provide opportunities for development and for a further expansion of the company´s operations. This will enable SID – PKZ to access a wider spectrum of foreign markets, which will undoubtedly help the Slovenian economy. This will also have a positive impact on a more competitive insurance and reinsurance of non-marketable risks, which we will continue to implement in SID Bank. We believe that this will further stimulate Slovenian exports and sustainable economic development in Slovenia.” Sergej Simoniti, President of the Management Board SID – PKZ, added: “We are delighted to become part of the Coface family. As part of SID Bank group, we have served the Slovenian economy in its expansion for the past 27 years. We are very proud that Coface has acknowledged our achievements and recognised our value. We are convinced that being part of Coface group will enable us to offer our clients an even better service. We believe that together with Coface we will strengthen our position as market leader and trade credit insurer of choice in the Adriatic region.” http://www.globenewswire.com/news-release/2019/04/15/1803694/0/en/COFACE-SA-Coface-strengthens-its-market-position-in-the-Adriatic-region-by-acquiring-SID-PKZ-the-leading-credit-insurance-company-in-Slovenia.html
Sompo International completes acquisition of Lexon Surety Group
Bermudian property and casualty (P/C) re/insurer Sompo International Holdings (SI) has acquired Lexon Surety Group (Lexon), the second largest independent surety insurer in the United States. Lexon is comprised of Lexon Insurance Company, Bond Safeguard Insurance Company and Fortress National Group. The acquisition is expected to positively impact the subsidiaries’ financial strength ratings. Lexon staff and office locations are to be integrated with SI’s Surety business under the leadership of Christopher Sparro, Chief Executive Officer (CEO) of U.S. Insurance Brian Beggs, Executive Vice President (EVP), Sompo International Surety will lead the combined operation and will relocate to Lexon’s headquarters in Mt. Juliet, Tennessee. SI is to continue offering the same array of commercial and contract surety bonds, court and probate bonds, and U.S. Custom bonds products Lexon has offered since 2001. Commenting on the acquisition, Sparro said, “We are very excited to welcome Lexon into our U.S. Insurance operation. They have an excellent reputation and their technical underwriting proficiency is closely aligned with our corporate culture. The combined organization will be one of the ten leading insurers in the U.S. surety market, significantly contributing to our strategic expansion in the U.S.” Beggs added, “Lexon has a reputation for quality products and strong distribution relationships which are highly complementary to our current surety capabilities. Their nationwide network of agents and brokers coupled with expertise in specialty niches such as energy will enable us to substantially accelerate the growth of our primary surety portfolio.” https://www.reinsurancene.ws/sompo-international-completes-acquisition-of-lexon-surety-group/
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Carl Icahn files lawsuit against AmTrust, controlling family
(Reuters) – Activist investor Carl Icahn filed a lawsuit on Monday against AmTrust Financial Services Inc (AFSI.O) and the family that controls the company, accusing them of trying to take the insurer private at the wrong time and at the wrong price. The lawsuit filed in the Court of Delaware accuses Karfunkel-Zyskind family of engaging in a transaction which will transfer “huge amounts of value” belonging to the company’s public stockholders to the controlling family. Earlier on Monday Czech-based Arca Capital, which own 2.4 percent of total outstanding shares of AmTrust, said it plans to work with Carl Icahn and other minority shareholders in opposing the proposed privatization transaction. Icahn had disclosed a 9.38 percent stake in AmTrust on May 17. On March 1, AmTrust said it would be acquired in a $2.7 billion deal by a group of shareholders including its founding family, chief executive officer and private equity funds – a move that Icahn has strongly opposed. https://www.reuters.com/article/us-amtrust-fin-serv-stake-icahn/carl-icahn-files-lawsuit-against-amtrust-controlling-family-idUSKCN1IM1UJ
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American Family Insurance and The Main Street America Group pursue merger
MADISON, Wis. & JACKSONVILLE, Fla.–(BUSINESS WIRE)–May 4, 2018–Madison, Wisconsin-based American Family Insurance group and Florida-based The Main Street America Group will pursue a merger, the companies announced today. Approved by the companies’ boards of directors, the merger will improve diversity of risk, promote growth through geographic expansion and provide agents and policyholders broader product offerings. Both American Family Insurance and Main Street America are financially strong mutual holding companies, and the merger does not involve capital outlay by either. Both also have national distribution capabilities, but each with a regional emphasis. The merger, expected to close by year-end, will require approval by mutual policyholder-members of both companies and state insurance regulators. “This merger will give policyholders – particularly small business owners – more insurance products to choose from and more ways to buy them,” said Jack Salzwedel, chairman and CEO of the American Family Insurance group. “Given our focus on policyholders and agents, that’s a win.” “Both companies are able to immediately take advantage of our unique marketplace positions, as well as the ability to bring new value to each of our agency distribution systems,” said Tom Van Berkel, Main Street America’s chairman, president and CEO. “Our ability to sell new products through our independent agent-customers will help us and our agents profitably grow, while simultaneously bringing American Family enterprise products to a different policyholder base.” Policyholder equity combined The combined equity of the merged entities is expected to be more than $9 billion. Upon completion of the merger, Main Street America will operate as a stand-alone brand within American Family Insurance group, similar to The General and Homesite, acquired in 2012 and 2013, respectively. Main Street America will retain its affiliation and strong support of Trusted Choice ®, the global branding program of the Independent Insurance Agents & Brokers of America. In 2017, the American Family group’s written premium was $8.8 billion. The company sells American Family-brand products, including auto, homeowners, life, business and farm/ranch insurance, primarily through exclusive agents in 19 states. American Family affiliates, The General, Homesite and AssureStart, also provide options nationally for consumers who want to buy and manage insurance over the internet or by phone. Main Street America wrote more than $1 billion in premium last year. The company sells commercial and personal insurance as well as surety bonds, all through independent agents. Main Street America has an “A” (Excellent) rating with a stable outlook for financial strength from A.M. Best, the same as American Family. American Family became a mutual holding company in 2017, making mergers like this possible. The American Family Insurance group ended 2017 with approximately 11,300 full-time equivalent employees and Main Street America has approximately 900. At this time, no major employee or operational changes are expected as a result of the merger. Read More … https://www.apnews.com/3f219bf6e4c34c1d91dd5f20e27ab2f9
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IAT Insurance enters surety market with IFIC acquisition
IAT Insurance Group has agreed to acquire IFIC Surety Group which includes International Fidelity Insurance Company and its subsidiary Allegheny Casualty Company. Through the deal IAT will enter the surety market. IFIC Surety Group is said to be the eighth largest surety writer in the US with over $150 million in gross written premium. IAT intends to maintain the IFIC brand and provide additional capacity and support its continued growth IAT has $1.3 billion in annual gross written premium and $1.2 billion of GAAP equity and acquired the renewal rights to a $40 million book of business from State Auto subsidiary Rockhill recently. “IFIC is a well-respected company with a long history in the surety sector and we are pleased to welcome it into the IAT family,” said IAT CEO Bill Cunningham. “Its leading position in the market and broad distribution network, make IFIC a natural fit for IAT’s strategic objectives. We value the quality of the IFIC team and their strong underwriting discipline, and we are pleased that chairman Fred Mitterhoff has agreed to stay on board for the next two years.” Fred Mitterhoff, IFIC chairman, added: “Like IAT, IFIC has always been a family-owned company and, when it came time to sell, we wanted to ensure that our values were maintained, including our commitment to employees, providing strong benefits, and fostering a supportive work environment. IAT is the perfect choice because they want to keep our talented team in place and invest in making the company even better.” https://www.intelligentinsurer.com/news/iat-insurance-enters-surety-market-with-ific-acquisition-15008
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AXA acquires XL Group in $15.3bn deal
French insurer AXA is acquiring Bermuda-based property/casualty commercial lines re/insurer XL Group for $15.3 billion (€12.4 billion) in cash. The price represents a premium of 33 percent to XL Group closing share price on March 2, 2018. The move will shift AXA’s business profile from L&S (life & savings) business to P&C (property & casualty) business. The deal will enable the group to become the biggest global P&C commercial lines insurer based on gross written premiums, according to a company statement. The transaction increases diversification of the business, enables higher cash remittance potential and reinforced growth prospects, rebalancing the profile towards insurance risks and away from financial risks, the company said. “XL Group has the right geographical footprint, world-class teams with recognized expertise and is renowned for innovative client solutions,” said AXA CEO Thomas Buberl. “Our combined P&C commercial lines operations will have a strong position in the large and upper mid-market space, including in specialty lines and reinsurance, and will complement and further enhance AXA’s already strong presence in the SME (small and medium-sized enterprise) segment. The two companies share a common culture around people, risk management and innovation, positioning AXA uniquely for the evolving future of the P&C industry,” Buberl added. The opportunity to acquire XL Group has led AXA to review its exit strategy from its existing US operations which AXA now expects to accelerate. Together with the planned IPO (initial public offering) of AXA’s US operations (expected in the first half of 2018 subject to market conditions) and intended subsequent sell-downs, this transaction would gear AXA further towards technical margins less sensitive to financial markets. The XL acquisition will be financed by around €3.5 billion of cash at hand, around €6.0 billion from the planned US IPO and related transactions, as well as about €3.0 billion of subordinated debt. There is also $9 billion of backup bridge financing already in place. Upon completion of the transaction, the combined operations of XL Group, AXA Corporate Solutions (AXA’s large commercial P&C and specialty business) and AXA Art will be led by Greg Hendrick, currently the president and chief operating officer of XL Group, who will be appointed CEO of the combined entity and join AXA Group’s management committee, reporting to Thomas Buberl. Greg Hendrick will work closely with Doina Palici-Chehab, AXA Corporate Solutions’ executive chairwoman, and Rob Brown, AXA Corporate Solutions’ CEO, to build an integrated organization and leadership team for this new company. Following the closing, Mike McGavick, XL Group’s current CEO, will become vice-chairman of the combined P&C Commercial lines operations and special adviser to Thomas Buberl, AXA Group CEO, to advise on integration-related and other strategic matters. XL Group CEO Mike McGavick, said: “Today marks an unrivalled opportunity to accelerate our strategy with a new strength and dimension. With every confidence in how we have positioned XL Group for the future, it is a substantial testament to AXA’s leadership and commitment to maintaining the XL Group brand and culture that we have come to an alignment”. “We are excited at the opportunity to build the scale, geographical footprint, product portfolio, and the unmatched commitment to innovation that relevance in the global insurance industry requires. In AXA we have found like-minded partners committed to the absolute necessity to innovate and move this industry forward,” McGavick added. https://www.intelligentinsurer.com/news/axa-acquires-xl-group-in-15-3bn-deal-14755
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Liberty restructures global risk, reinsurance, and specialty operations
Liberty Mutual has announced the operating structure of its recently formed Global Risk Solutions business, which will consist of specialty, reinsurance, and surety operations. The businesses included in the new arrangement are National Insurance, Global Surety, North American Specialty, and Liberty Specialty Markets (LSM). LSM is to operate all of Liberty’s reinsurance and specialty insurance businesses outside North America, and already includes Liberty’s $1.5 billion global reinsurance business, led by President of Liberty Mutual Reinsurance Dieter Winkel. The plan is to unite Liberty Mutual’s and Ironshore’s international specialty operations and the existing operations of LSM under a single management team in London. These will include operations in South America, Asia Pacific, Bermuda and Europe, as well as the recently acquired Pembroke, which will continue to operate independently from Liberty’s syndicate business. Commenting on the new arrangement, President and Managing Director of LSM, Matthew Moore said: “This move will bring together the skills and expertise of our people around the globe under one executive management to leverage our global scale and local capabilities. Each of the constituent parts of the new LSM are excellent businesses in their own right, putting customers at the heart of everything they do. “As the (re)insurance market becomes ever more globalised, it is crucial that we increase our communication and collaboration across geographic borders, to serve our customers better and grow a world beating business. It will make us easier to do business with, and help the staff and customers of every part of the new LSM to prosper.” Mark Wheeler, former Chief Executive Officer (CEO) of recently consolidated Ironshore International and Pembroke Managing Agency, will become LSM’s President, International Markets. He will be responsible for the coordination of LSM’s international business outside the UK. “There is much potential to realise as we bring our global business under one strategy, and we are determined to make that happen,” said Wheeler. “I am hugely excited by the challenges and opportunities ahead.” Tim Glover will now take over Wheeler’s former position as CEO of Pembroke. https://www.reinsurancene.ws/liberty-restructure-global-risk-reinsurance-specialty-operations/
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