17 September 2014 Insurance

Sompo deal opens US for Canopius

Following the acquisition of Canopius by Sompo Japan Insurance, the former will be able to access previously unobtainable lines, specifically in the US.

Speaking at the Monte Carlo Rendez-Vous, Michael Watson, chairman and chief executive officer of Canopius, said that he was delighted with the acquisition, which will also allow the company to retain its entrepreneurial mindset.

“This is the first fully fledged move into international re/insurance for Sompo, so it has allowed Canopius to remain as a standalone business,” he said.

Watson spoke of Sompo’s global licence network, with specific reference to its US business, saying that the complementary nature of Sompo’s licence network gives Canopius an interesting angle that not all Lloyd’s businesses have access to.

“They have an admitted area in the US, and as Lloyd’s can’t run business on an admitted basis, the acquisition will allow us now to create specialist products that we can sell on an admitted basis, which is a significant advantage,” he said.

“Also, Sompo has been in Brazil for 50 years and we’re cooperating with new-found colleagues in Brazil to develop business opportunities; they have licences in Turkey, India, China and more as well.”

The acquisition has brought benefits to Sompo too, allowing the company to diversify its underwriting outside of Japan, which Watson said will allow the combined entity to take more of a leadership position in the market.

“We’re pretty optimistic and bullish despite the challenges in the market,” he said. “We’re developing new platforms, hiring new underwriters and making acquisitions.

“Our goal is not to try and colonise the US, but we have specialist underwriters there and we can see the opportunities to expand and get closer to customers.”

Sompo and Canopius also combined their European reinsurance businesses earlier in the month.

“The operations were both fairly small, so it made sense to combine them. Having a joined-up team should be beneficial and allow us to create a reinsurance business that is more noticeable to brokers,” Watson said.

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