19 December 2014 Insurance

ACE acquires Fireman’s Fund unit as Allianz restructures

ACE has agreed to buy the renewal rights to Allianz Group’s Fireman’s Fund personal lines insurance business in the US, focused on high net worth customers, for $365 million.

The move follows the decision by Allianz earlier in 2014 to reposition its property & casualty (P&C) insurance business in the US by integrating the Fireman’s Fund Insurance Company (FFIC) commercial business into Allianz Global Corporate & Specialty (AGCS), the global industrial insurer of Allianz Group.

Allianz said the sale will allow it to focus on building its commercial P&C business across North America under the Allianz brand, creating a business with combined revenues that are expected to total over $3 billion, based on gross premiums written in 2013.

The new leadership team for this combined FFIC/AGCS business was announced on December 12, with AGCS Board Member Art Moossmann becoming CEO & president of both AGCS North America (AGCS NA) and FFIC beginning January 1, 2015.

The FFIC commercial business will be integrated into AGCS, with all active product lines moving to AGCS.

In parallel, subject to legal and regulatory approval, it is the intention to ultimately separate and consolidate the legacy business of FFIC, including legacy asbestos and environment exposures, legacy worker’s compensation, and legacy construction defect liabilities, into a stand-alone company, San Francisco Re.

The Fireman’s Fund personal insurance business will be integrated into ACE’s existing high net worth personal lines business. In 2013, Fireman’s Fund had $891 million in personal insurance gross premiums written. The sale includes the renewal rights, reinsurance of existing liabilities, and access to an extensive network of 1,100 agents and brokers. The transaction, which is subject to legal and regulatory approval, is expected to be completed in the second quarter of 2015.

“These latest moves will complete the picture of the reconfiguration of our property & casualty insurance business in the United States with a strong footprint in commercial insurance,” said Axel Theis, incoming member of the board of management of Allianz.

“The sale of the Fireman’s Fund personal insurance business will give it a larger scale and ensure its continuity for brokers and policyholders.ACE is a highly respected global insurer with a vision to grow this business, capitalizing on its strength and strong reputation in the market.

“With this transaction Allianz will also gain capital efficiencies by releasing capital allocated to the personal insurance risks. In addition, we will use the proceeds to finance the restructuring of the Fireman’s Fund commercial P&C business. Taken with the creation of the new run-off carrier San Francisco Re, these measures enable Allianz to focus its energies even more strongly on successfully integrating the Fireman’s Fund commercial business into AGCS.”

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