Validus acquires US insurer; reaches for levers of diversification

Validus has announced a definitive agreement to acquire US specialty lines insurer, Western World Insurance Group, as it looks to develop a more diversified group portfolio.

Validus is paying $690 million in cash to acquire 100 percent of Western World’s stock. As of March 31, 2014 the insurer’s book value was estimated at $518.3 million. Validus is planning to close the transaction during the third quarter of 2014.

Validus has indicated that it intends to retain Western World as a stand-alone business, preserving the name, brand equity and market reputation of the US carrier. The New Jersey-based insurer has a 50-year track record of profitability as a specialty lines insurance carrier.

Commenting on the transaction, Ed Noonan, Validus’ chairman and CEO, comments, “I am very pleased to welcome Western World to the Validus Group and am excited about the potential of combining these two companies. Bringing together Validus, a leader in the short-tail insurance and reinsurance market, and Western World, with its excellent US distribution platform, outstanding management and industry leading technology, creates a franchise that will provide compelling products and services for our customers.”

Tom Mulligan, Western World’s CEO, adds, “Joining Validus is a great outcome for Western World. Validus brings capital and expertise in short tail classes of business which will advance the competitive advantages in all of our underwriting divisions. My colleagues and I look forward to working with Validus to provide additional products and capacity to our agents and customers.”