Tower Group To Merge Reinsurance Operations
Tower Group International, Ltd. announced today [June 3] that it has entered into an agreement to acquire American Safety Reinsurance, Ltd., the Bermuda-based reinsurance subsidiary of American Safety Insurance Holdings, Ltd., from Fairfax Financial Holdings Limited for approximately $59 million.
The purchase of American Safety’s reinsurance unit is expected to close in the second half of 2013, following the completion of Fairfax Financial’s acquisition of the company.
Following the close of the transaction, the operations and employees of American Safety Reinsurance will be combined with Tower’s Bermuda reinsurer, Tower Reinsurance, Ltd.
“The acquisition of American Safety Reinsurance enables us to diversify and expand our specialty reinsurance business and clients as well as to accelerate our development of our newly formed Bermuda reinsurance business platform needed to support this growing business,” said Michael H. Lee, Tower’s President and Chief Executive Officer.
“American Safety Reinsurance’s specialty casualty-focused reinsurance business will complement and further diversify Tower Re’s existing business, which is primarily comprised of qualifying quota share reinsurance treaty business for Lloyd’s syndicates and property retrocessional excess quota share business underwritten with select partners. We will also benefit from the addition of American Safety Reinsurance’s experienced casualty underwriting, support staff and extensive network of reinsurance brokers and specialty insurance company clients in the U.S. We expect this acquisition to generate approximately $40 million of premiums and be modestly accretive to Tower’s earnings in 2013, with a growing profit contribution beginning in 2014.”
Tower Re was established in the first quarter of 2013 following the successful completion of the merger between Tower Group, Inc. and Canopius Holdings Bermuda Limited, which was renamed Tower Group International, Ltd. and became the ultimate parent company.
Tower Re is a specialty reinsurance company that provides a range of reinsurance products to Lloyd’s syndicates and to select insurance companies in the US and Bermuda.
Tower Group International, Ltd. is a Bermuda-based global diversified insurance holding company and is listed on the NASDAQ Global Select Market. Through its insurance and reinsurance subsidiaries in the US and Bermuda, collectively referred to as Tower Group Companies and rated A- [Excellent] by A.M. Best, we deliver a broad range of commercial, personal and specialty insurance products and services in the US and specialty reinsurance products globally through its distribution and underwriting partners.
