8 February 2018Insurance

XL shares jump on takeover news

Shares of Bermuda-based insurer XL Group jumped following news that it is attracting interest from rivals including Allianz of Germany.

The news report was published on Feb. 7 by Bloomberg News citing “people with knowledge of the matter.”

The XL Group share price was up 12.45 percent in New York trading at 1pm UK time on Feb. 8. Allianz declined to comment after having been approached by Intelligent Insurer.

Interest from insurers in potentially acquiring XL, which had a market value of around $10 billion at Tuesday’s close, is preliminary and may not lead to a takeover, the people reportedly said. Allianz is looking at XL as a potential target to grow its casualty coverage business in the US, according to Bloomberg News.

XL Group made a net loss of $560.4 million in 2017 compared to a $440 million net profit it posted the year before.

The company blamed the loss on high levels of natural catastrophe losses as well as a non-recurring tax charge of $100.5 million related to the revaluation of the net deferred tax asset as a result of the reduced US corporate income tax rate enacted under the US Tax Cuts and Jobs Act.

Natural catastrophe pre-tax losses net of reinsurance, reinstatement and premium adjustments and redeemable non-controlling interest reached $2 billion for the full year 2017, compared with $636.3 million for the prior year.

Market observers have been speculating that the recent US tax change and the significant natural catastrophe losses that hit the market in 2017 will trigger consolidation in the re/insurance sector with a particular focus on Bermuda.

In a recent move, American International Group (AIG) is acquiring Bermuda-based Validus Holdings for $5.56 billion.

The transaction enhances AIG’s general insurance business, adding a reinsurance platform, an insurance-linked securities (ILS) asset manager, a presence at Lloyd’s and complementary capabilities in the US crop and excess and surplus (E&S) markets.

Join us at Intelligent Automation in Insurance - London 2018.  Book by Feb 28th and you could save £300.

More of today's news

SCOR shunned large proportional deals at renewals

Hiscox reveals management restructure to drive growth

AXIS grows reinsurance segment by 62% YOY in Q4

Brokerslink replaces CEO

Willis Towers Watson grows reinsurance segment by 5% YOY in Q4 2018

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk

More on this story

12 February 2018   Re/insurer XL Catlin has appointed Phil Xue as chief executive officer of XL Insurance China.
14 February 2018   XL Group CEO Michael McGavick said that he is not surprised that there is speculation about a potential takeover of XL Group by other market players.
21 February 2018   XL Catlin’s casualty team has taken the decision to withdraw from the UK and Ireland commercial motor fleet market.