Arch buys Allianz US middle market business for $450m
Arch Insurance North America has agreed to buy Allianz's US MidCorp and entertainment insurance business for $450 million, the company announced today.
Bermuda-based Arch said it estimated the capital cost of the business, which is written by Fireman's Fund Insurance Company, said the estimated capital requirement to support the business will be approximately $1.4 billion.
The business wrote $1.7 billion of gross premium written in 2023 and there are approximately 500 individuals supporting the business, including underwriting, claims and other professional staff, who, are expected to become Arch Insurance employees.
“The acquisition of the MidCorp business meaningfully expands our presence in the US middle market, a targeted growth area for Arch,” said Matt Shulman, CEO for Arch Insurance North America. “This transaction will enhance our distribution relationships, broaden our product suite and expand our ability to participate in these underwriting-intensive middle-market lines. We are also excited to add a market-leading Entertainment business that complements Arch Insurance’s existing portfolio of specialty products.”
“We are proud of our employees who have served our US MidCorp and Entertainment clients and brokers over the years,” said Tracy Ryan, Allianz Global Corporate and Specialty chief executive officer for North America and member of AGCS’s board of management. “We are confident that they will be a strong addition to Arch, ensuring continuity for our partners.”
Arch Insurance currently provides a wide range of property, casualty and specialty insurance options across market segments and wrote approximately $5.8 billion of gross premium in North America in 2023. This transaction builds upon Arch Insurance’s North America business that has delivered double-digit topline growth for five consecutive years, the company said.
“Combining this platform, broad set of client relationships and talented employee-base with Arch’s capabilities creates an attractive middle-market business that should further establish Arch Insurance as a market leader in the specialty insurance space,” said Nicolas Papadopoulo, CEO for Arch Worldwide Insurance Group. “We take pride in our client-focused, inclusive culture and look forward to incorporating the experience and expertise of our new colleagues as we continue to raise the bar and fulfill our brand promise of Pursuing Better Together.”
This transaction is expected to close in the second half of 2024 and is subject to regulatory approvals.
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as financial advisors to Arch, and Willkie Farr & Gallagher LLP is serving as the Company’s legal advisor.
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