Arch To Acquire Businesses From Allianz

April 5, 2024 | 0 Comments

Arch Insurance North America, part of Arch Capital Group Ltd, has entered into a master transaction agreement to acquire the U.S. MidCorp and Entertainment insurance businesses, including select specialty insurance programs, from Allianz Global Corporate & Specialty SE [AGCS] for a $450 million cash consideration to Allianz.

A spokesperson said, “Arch estimates its capital requirement to support the business will be approximately $1.4 billion. The businesses being acquired are written by Fireman’s Fund Insurance Company and its subsidiaries and collectively totaled $1.7 billion of gross premium written in 2023. Approximately 500 individuals supporting the business, including underwriting, claims and other professional staff, are expected to become Arch Insurance employees as part of the transaction.”

“The acquisition of the MidCorp business meaningfully expands our presence in the U.S. middle market, a targeted growth area for Arch,” said Matt Shulman, CEO for Arch Insurance North America. “This transaction will enhance our distribution relationships, broaden our product suite and expand our ability to participate in these underwriting-intensive middle-market lines. We are also excited to add a market-leading Entertainment business that complements Arch Insurance’s existing portfolio of specialty products.”

“We are proud of our employees who have served our U.S. MidCorp and Entertainment clients and brokers over the years,” said Tracy Ryan, AGCS Chief Executive Officer for North America and member of AGCS’s Board of Management. “We are confident that they will be a strong addition to Arch, ensuring continuity for our partners.”

The spokesperson said, “Arch Insurance currently provides a wide range of property, casualty and specialty insurance options across market segments and wrote approximately $5.8 billion of gross premium in North America in 2023. This transaction builds upon Arch Insurance’s North America business that has delivered double-digit topline growth for five consecutive years.”

“Combining this platform, broad set of client relationships and talented employee-base with Arch’s capabilities creates an attractive middle-market business that should further establish Arch Insurance as a market leader in the specialty insurance space,” said Nicolas Papadopoulo, CEO for Arch Worldwide Insurance Group. “We take pride in our client-focused, inclusive culture and look forward to incorporating the experience and expertise of our new colleagues as we continue to raise the bar and fulfill our brand promise of Pursuing Better Together.”

The spokesperson said, “This transaction is expected to close in the second half of 2024 and is subject to regulatory approvals.

“Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as financial advisors to Arch, and Willkie Farr & Gallagher LLP is serving as the Company’s legal advisor.

“An Arch slide presentation regarding the master transaction agreement and the related transactions described will be posted to the Presentations section of our website.”

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