Mitsui Sumitomo seals $400m deal to buy Transverse for US expansion

Mitsui Sumitomo Insurance (MSI) has agreed to acquired US-based hybrid fronting company Transverse Insurance Group from Virgo Investment Group in a deal valuing slightly over $400 million (approximately ¥54.2 billion).

MSI views the acquisition to be a “good opportunity” to capture the growth of the US managing general agent (MGA) market and build out its presence in the country.

Warren, New Jersey-based Transverse is a non-life insurer that delegates certain functions and authorities to MGAs and transfers risks underwritten by MGAs to reinsurers on an admitted or excess and surplus (E&S) lines basis. Through its licenses in all 50 states in the US and network with various MGAs, Transverse will serve as a platform for MSI to incorporate the growth of the US MGA market.

MSI said the transaction will allow it to create a new source of diversified profitability for the group’s operations, as well as a differentiated proposition with “considerable competitive advantage” to explore new growth opportunities in the market.

Tamaki Kawate, director, head of international business of MSI and Johan Slabbert, chairman & CEO of MS Amlin Distribution Holdings, said: “This acquisition marks the start of a new phase for MSI as a market-leading global (re)insurance business. It not only demonstrates our commitment to sustainable growth in the US but highlights our differentiated proposition with the stability and financial strength of our parent company. This acquisition will allow Transverse to accelerate its competitive advantage by securing greater access to product lines and new distribution opportunities, serving the evolving and long-term needs of its MGAs and (re)insurer partners more effectively.”

Erik Matson, chairman, CEO, co-founder of Transverse, added: “We are all very excited about this development, and what it will mean for our future growth opportunities. This is a significant milestone for everyone involved in our growth journey and we’re delighted to have found a home in MSI. Its balance sheet strength, rating, and international network will exponentially fast-track our development and innovation. This acquisition cements the success of our business and reiterates the value of our hybrid fronting model as a valuable tool that allows our partners to maximise the market cycle.”

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