Roundup of the weekly news and developments from the global insurance market with stories from Liberty, Aon, Axa and more
Liberty Mutual buys Ironshore in $3bn deal
Liberty Mutual, the fourth-largest property and personal injury insurer in the US, has agreed to buy Ironshore from Fosun International for about $3 billion to expand in the specialty commercial market. Ironshore will retain its management team and brand after the completion of the deal, Liberty said in a statement this week. Fosun acquired Bermuda-based Ironshore in 2015 and then sought an exit after a ratings firm cited concerns about the parent company’s financial strength. Ironshore has its European headquarters in Dublin where it employs a small number of people. Policyholder-owned Liberty Mutual is known for providing home, motor and workers’ compensation coverage in the US. The Boston company is among insurers seeking growth in niches where there is more of an opportunity to stand out from competitors. Ironshore protects commercial policyholders against environmental risks, damage to satellites in launch or orbit and losses tied to political turmoil in international markets. It also offers liability coverage to corporate executives and healthcare providers. The final price is subject to adjustments and will be 1.45x the target company’s tangible book value at the end of this year. The deal is expected to be completed in the first half of 2017
Aon appoint Alistair Lester to M&A insurance head
Alistair Lester has been appointed by Aon as their new M&A head following a two year stint at Willis Towers Watson as head of facultative operations. In his new role at Aon, Lester will be responsible for Aon’s M&A business which has recently become Aon Strategic Advisors & Transaction Solutions. Lester served at Aon for 8 years up until 2004 as a managing director; his return will see him take charge of 350 M&A professionals in four continents. M&A has been an attractive market for a number of companies as they look for greater rates due to increasing demand for the products in the market. Lester will have responsibility for exploiting this trend at Aon.
Axa looks to expand further in the energy market
Axa is taking steps to grow in the energy market and have hired Mark Mackay to help lead this expansion. Axa presently writes business in power generation and the renewables business with both property and liability exposures, but is now looking to move into chemicals and midstream risks. Axa have put to bed rumours that it will expand into the upstream market as well by saying they have no future ambitions in this area. Mackay is thought to have been brought in to head up a new energy unit at the company with a $200mn lead line at his disposal. Mackay was most recently global product leader for offshore energy at AGCS.
Lloyds to take operational restructuring steps following review
Lloyds of London have revealed they will restructure in a move to focus its operations to protect, promote and serve the market more effectively. The move includes the appointment of Jon Hancock as the new head of the corporation’s performance management division. Peter Montanaro has been given the responsibility of leading a new syndicate capability oversight team that will report into Hancock. A number of mergers, led by Hancock, have also been announced which will see a new policyholder and third party oversight function being constructed. The new function will incorporate the teams responsible for customers and conduct, including delegated authorities, claims, conduct and complaints. Speaking about the changes Lloyd's CEO Inga Beale said: "This new structure and various initiatives will allow us to become more effective and efficient, ensuring the market has clear routes into the Corporation, avoiding duplication, whilst freeing up teams to look at the issues and opportunities around ensuring Lloyd's remains at the heart of global insurance and reinsurance.”
CFC appoints Evercore to look at new investments
CFC Underwriting has appointed Evercore to explore refinancing options and could potentially look at a change in ownership. A spokesperson for CFC confirmed the news that the MGA had appointed the bankers "to explore options" as they felt it was the "right time" to make changes. It has been five years since the management team completed an MBO from Hyperion. The MBO was led by founder and current CEO David Walsh. The buyout was backed by a consortium of six private investors and saw Hyperion relinquish its majority stake in the MGA. It is understood that current investors are seeking to exit. The spokesperson insisted that this appointment does not mean that CFC is looking to sell and stated that it wishes to remain independent.
$1.1bn Ascot acquisition completed by CPPIB
The Canada Pension Plan Investment Board (CPPIB)'s has completed its $1.1bn purchase of Ascot. The sale of the Lloyds carrier was announced in September and it is understood that the deal was completed earlier this month. It has been reported that the deal is expected to be between 1.5x and 1.6x the book value. AIG will receive approximately $240mn in cash proceeds from the transaction with $625mn of capital that supported the underwriting also released. All parties have confirmed that they would continue their current partnership in Bermuda. Each of Ascots 194 staff and senior management, including CEO Andrew Brooks will remain at the company after the deal finalises.
CFC gets top spot in cyber rankings survey
A recent cyber rankings survey has given CFC the top position this week. The survey reviewed all of London’s cyber brokers and underwriters and was conducted by an independent panel of researchers. CFC saw its underwriters take the top 3 positions in the survey, rated by other brokers in the market. Greame Newman and Andy hall took third and second place respectively, with Alex Jomaa taking the top spot with 10% of brokers ranking him as the best in the market. The top 3 broker spots were occupied by JLT, Paragon and Millers. Jack Lyons, William Wright and Tom Quy were the three brokers to occupy these positions.