Allianz sells US Fireman’s Fund Insurance business to Arch for $1.4bn
Arch Insurance North America, part of Arch Capital Group, has entered into a master transaction agreement to acquire the US midcorp and entertainment insurance businesses, including select specialty insurance programs, from Allianz Global Corporate & Specialty SE (AGCS) for $450 million cash. The total transaction value is estimated at $1.4 billion.
The transaction includes risk transfer for Allianz, as Arch is assuming approximately $2 billion of loss reserves associated with the business. 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 totalled $1.7 billion of gross premium written in 2023. Approximately 500 employees from Allianz are expected to transfer to Arch as part of the agreement.
Allianz said AGCS US will focus on its large corporate and specialty business as part of its Allianz Commercial strategy.
Matt Shulman, CEO for Arch Insurance North America, said: “The acquisition of the MidCorp business meaningfully expands our presence in the U.S. middle market, a targeted growth area for Arch. 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.”
Tracy Ryan, AGCS chief executive officer for North America and member of AGCS’ Board of Management, said: “We are proud of our employees who have served our US MidCorp and Entertainment clients and brokers over the years. We are confident that they will be a strong addition to Arch, ensuring continuity for our partners.”
Arch Insurance currently provides a 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.
“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.”
This transaction is expected to close in the second half of 2024 and is subject to regulatory approvals.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
