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Top International Insurance M&As of 2020

2021-01-05 17:35:07

Since it was first announced in March, the proposed merger between Aon and Willis became the most significant merger and non-merger insurance story of the year. But there were also other proposed and completed transactions that caught the attention of Insurance Journal's international readers. Here are some of the M&A articles that were most popular with readers of international news in 2020:

Aon is going to buy Willis Towers Watson

Global insurance brokers Aon and Willis Towers Watson announced in March that they had agreed to merge in an all-equity transaction with an implied combined share value of approximately $ 80 billion. Upon completion of the combination, Aon's existing shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis. According to S&P, Aon plans to partner with Willis in an all-stock transaction worth approximately $ 30 billion, exchanging Willis stock for Aon stock. The combined company will be named Aon. Combined, the companies will have more than $ 20 billion in revenues. Aon reported $ 11 billion in revenues with $ 2.2 billion net income for 2019, compared to $ 9 billion in revenues and $ 1.4 billion net income for Willis Towers Watson. Aon will maintain its headquarters in London, United Kingdom. The parent company is incorporated in Ireland. The combined company will have 95,000 employees worldwide, with what it said will be a "significant presence" in Chicago, New York and Singapore. John Haley will assume the role of Executive Chairman with a focus on growth and innovation strategy. The combined company will be led by Greg Case and Aon Chief Financial Officer Christa Davies. The board of directors will consist of proportional members of the current directors of Aon and Willis Towers Watson. In December, Aon confirmed that the European Commission has begun a review of the proposed merger. Aon said the review is a common next step "for a transaction of this size and complexity" and said it is on track to close the deal in the first half of 2021.

Third Point Re and Sirius Group agree on $ 788 million merger

Third Point Reinsurance and Sirius International Insurance Group, a global multi-line insurer and reinsurer, announced in August that they had agreed to combine in a cash and stock transaction worth $ 788 million. The new company will be renamed SiriusPoint and based in Bermuda. Third Point Re will purchase Sirius from its parent company, China Minsheng Investment Group, for $ 100 million in cash and approximately 58 million in Third Point Re shares. Both Third Point Re and Sirius are headquartered in Bermuda. The transaction, which is expected to close in the first quarter of 2021, will create a global business with approximately $ 3.3 billion in tangible capital.

Zurich, farmers agree to buy MetLife & # 39; s US P / C business for $ 3.94 billion

Zurich Insurance and Farmers Exchanges agreed in December to buy MetLife's US property and accident business for $ 3.94 billion, the insurers said, in an environment where the COVID-19 pandemic has made auto and home insurance companies more profitable. The Swiss insurer is contributing $ 2.43 billion to the deal through its Farmers Group Inc (FGI) unit, while the Farmers Exchanges will contribute $ 1.51 billion. The deal gives Farmers Exchanges, to which FGI provides administrative and management services, a nationwide presence in the US and access to new distribution channels.

Arch Capital buys Watford for $ 700 million in cash, with support from former rival Enstar

Arch Capital and Enstar Group had entered into a bidding war for Watford Holdings for several months in late 2020. Ultimately, Arch emerged as the buyer by making a cash offer worth approximately $ 700 million. Enstar, which owns 9.1% of Watford's common stock, at the same time agreed to give up its quest to buy the insurer. In May 2020, activist investor Capital Returns Management LLC called for the sale or winding down of Watford, complaining of "consistently poor business and stock performance" compared to his peers in the industry. When an initial offer of $ 31.00 per share was received from Enstar in early October, Ronald D. Bobman, president of New York-based Capital Returns, said that while encouraged by the offer, the price was still a significant discount. was & # 39; compared to the value of Watford's extraordinarily attractive book. According to the latest negotiated deal, Arch will pay $ 35.00 per share for Watford.

Equity firm Cinven, GIC in Singapore, buys insurance broker Miller from Willis

Private equity firm Cinven and GIC, Singapore's sovereign wealth fund, agreed in November to acquire London-based specialist insurance and (re) insurance broker Miller from its partners and corporate member, Willis Towers Watson. Bloomberg reported that the deal values ​​the company at approximately £ 680 million ($ 896 million). Founded in 1902, Miller operates in the UK, Lloyd & # 39; s and internationally. It employs more than 640 people through its offices in London, Ipswich, Brussels, Paris, Singapore and Geneva. Miller specializes in marine, energy, credit and political risks, delegated authorities, professional risks, property, accident, sports and entertainment, and reinsurance. Miller places c. £ 2 billion in premiums annually. Cinven and GIC said they were attracted to invest in Miller, in part because it is a cash-generating business model with a strong position in the wholesale insurance markets.

K2 Insurance agrees to acquire the portfolio from Pioneer Underwriters

Pioneer Underwriters, the managing general agency, and K2 Insurance Services, the specialist insurance services holding company, signed the terms of a portfolio transfer in April to facilitate the purchase of Pioneer by K2. Under the transaction, Pioneer's ongoing underwriting portfolio, along with insurance and support staff, will be transferred to K2. The transferred business will consist of underwriting units specializing in real estate disaster reinsurance, financial institutions, international real estate faculties and maritime specialties. These units will remain based in London and will form the cornerstone for future growth in K2's international platform. Together, the units will insure approximately £ 150 million (US $ 185.2 million) in gross written premium in 2020, all of which are backed by high-quality capacity providers, according to a statement from London-based Pioneer.

British insurer RSA accepts $ 9.6 billion takeover offer

Canada & # 39; s Intact Financial and Tryg of Denmark announced in November that they had agreed to buy UK insurance group RSA for 7.2 billion pounds ($ 9.6 billion) in cash in one of Europe & # 39; s largest financial acquisitions of 2020. Best known in the UK for its & # 39; More Than & # 39; brand, RSA offers home, motor and commercial insurance and also has major offices in Canada, Ireland and Scandinavia. The proposed takeover would lead to the break-up of the British group. Intact would acquire RSA's Canadian, UK and international operations, while Tryg would acquire the Sweden and Norway operations. The pair would co-own the RSA's Danish unit.

Tokio Marine Completes Acquisition of Pure Group

Tokio Marine Holdings announced in February that it had completed the acquisition of New York-based Privilege Underwriters Inc. and its subsidiaries, known as Pure Group, which specializes in the high net worth US insurance market. The purchase price was $ 3.1 billion (approximately JPY 325.5 billion). The deal was completed through Tokio Marine & # 39; s 100% subsidiary HCC Insurance Holdings, Inc. Tokio Marine acquired 100% of the shares of Privilege Underwriters Inc. from existing shareholders, including Stone Point (51%), KKR (34%), AXA XL (10%), Pure management and others (5%). For 2018, Pure reported a consideration of $ 229 million, pre-tax profit of $ 73 million and $ 963 million in premiums under management. The company profile consists of homeowners (57%), car (23%), inland shipping (9%) and other lines for high net worth customers.

Allianz buys UK's LV General Insurance and Legal & General & # 39; s Non-Life Unit

Allianz Holdings plc, the UK subsidiary of Allianz SE, completed in January the acquisition of the remaining 51% of LV General Insurance Group from the Liverpool Victoria Friendly Society. Total consideration by Allianz for 100 percent of LV GIG will be up to £ 1.078 billion (US $ 1.429 billion). In a separate deal, Allianz Holdings announced that it has completed the acquisition of 100 percent of L&G GI's General Insurance division for £ 242 million ($ 320.8 million). This business will be combined with LV GIG, although the Legal & General brand will be used in the UK general insurance market for up to three more years, said Allianz Holdings, headquartered in Guildford, England. The closing of these deals positions Allianz Holdings as the second largest general insurer in the UK.

French Mutual Covéa Scraps $ 9 Billion Purchase of PartnerRe from EXOR

EXOR announced in March that it had agreed to sell PartnerRe to French mutual insurer Covéa. However, in May, Covéa had scrapped the deal due to the market dislocation caused by the coronavirus pandemic. However, in August, EXOR and PartnerRe withdrew a stance on Covéa's deal failure, agreeing to make some investments in EXOR and investments in some specialty insurance vehicles managed by PartnerRe. EXOR bought the Bermuda-based reinsurer in March 2016 for $ 6.72 billion in cash.

India’s Future Group sells stake in insurance joint venture with Generali

India's Future Group said in April that it has selected UBS Group AG to lead the sale of its stake in an insurance joint venture with Assicurazioni Generali SpA of Italy, according to people familiar with the matter. Future Group is working with the Swiss bank on plans to divest its stake in the Future Generali life and non-life insurance business, people said, asking not to be identified as the discussions are private. The Indian group, which controls companies, including Amazon.com Inc.'s local retail partner, has had initial talks with potential buyers, the people said.

Tysers (Integro) completes acquisition of Lloyd & # 39; s Broker RFIB

Integro Insurance Brokers Holdings Ltd., the parent company of UK-based Integro Insurance Brokers Ltd., trading under the Tysers brand, announced in June that it would acquire Risk Transfer Group, RFIB's privately held parent company, an independent specialist Lloyd & # 39; s broker. London-based Integro and Tysers merged their insurance activities in 2018.

AXA sells Persian Gulf operations for $ 269 million to a Kuwait-based group

In November, AXA SA said it sold its Persian Gulf operations for $ 269 million to a Kuwait-based group as the French insurance giant shifts its focus and abandons some foreign investment to bolster its finances amid the coronavirus pandemic . The Paris-based insurer said it has expanded its interests in AXA Gulf, AXA Cooperative Insurance Co. and AXA Green Crescent Insurance Co. sold to Gulf Insurance Group, a Kuwaiti insurance group in which Fairfax Financial Holdings is a major shareholder. As part of the AXA transaction, Gulf conglomerate Yusuf Bin Ahmed Kanoo will acquire its shares in AXA Gulf and AXA Cooperative Insurance Co. The total value of the sale to Gulf Insurance Group, expected to close in the third quarter of 2021, is $ 475 million. Gulf Insurance Group acquires a primarily health and property insurance company with more than 30 offices and a sales footprint in Saudi Arabia, the United Arab Emirates, Bahrain, Oman and Qatar.

Investors Pelican Ventures, J.C. Flowers buy Ariel Re from Argo

Pelican Ventures and J.C. Flowers & Co., both private equity investors with significant insurance expertise, announced in November that they agreed to acquire Ariel Re reinsurance franchise from Argo Group for an undisclosed amount. Ariel Re is a global property and casualty reinsurance insurer operating through Lloyd & # 39; s Syndicate 1910. Argo bought Ariel Re in February 2017. Argo Group has recently taken a series of steps to restructure its business after some poor results and a leadership change . As part of the Ariel Re-deal, Pelican Ventures and JC Flowers also announced that they have reached an operational partnership agreement with Apollo Syndicate Management Ltd. for the further development of SPA 6133, a Lloyd & # 39; s Special Purpose Agreement (SPA) aimed at reinsurance from real estate disasters. . Under the partnership, Pelican Ventures and J.C. Flowers provide additional capital, operational support and distribution.

Argo Group agrees to sell Italian operations

Argo Group International Holdings Ltd., a Bermuda-based specialty insurance company, has agreed to sell its Italian operations, ArgoGlobal Assicurazioni S.p.A (AGA), to Perfuturo Capital AG, a Swiss holding company. Perfuturo is wholly owned by Philantra Holding AG – a specialist in green, technology and renewable energy. Completion is expected in early 2021. Financial details of the transaction have not been disclosed. “We are confident that Perfuturo's expertise and knowledge of the European market will enable AGA to thrive,” said Matt Harris, Argo Group's head of international operations. “This transaction is in line with our strategy to simplify the business and streamline operations. "Argo Group will continue to focus on specialty insurance activities that we expect will result in profitable growth and improved shareholder value," said Harris.

Generali buys AXA's Greek operations for $ 203 million

Assicurazioni Generali SpA agreed to acquire the Greek operations of French insurer AXA SA as part of its plans to expand into European non-life and health businesses. The Italian company will pay EUR 165 million ($ 203 million) for AXA Greece, which is equivalent to 12.2 times its 2019 earnings, subject to closing adjustments, the statement said. Generali has also extended an existing distribution agreement between AXA and Alpha Bank AE for 20 years from the current expiration date of March 2027. AXA currently sells insurance products in Greece through a long-term distribution agreement with Alpha Bank, making the renegotiation of the partnership an important step for the agreement. The company distributes its products through a network of more than 600 agents. In 2019, AXA Greece posted total gross insurance premiums of approximately EUR 168 million.

Nexus Completes Acquisition of Hiscox MGA Marine Business

Independent specialist general agent Nexus Group has announced that it has acquired the Hiscox MGA Marine (HMM) business from Hiscox MGA Ltd. on December 30, 2020 through an asset purchase in Millstream Underwriting Ltd., a Nexus Group company specializing in consumer products. insurance. The team in HMM insures yachts and the shipping industry. The company was originally founded in 2012 and acquired by Hiscox in 2015. Hiscox will continue to provide insurance capacity for the company alongside other existing markets, led by long-standing supporters Talbot and AXA XL. HMM becomes an integral part of Millstream and the business just keeps going.


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