Munich Re Acquires UK’s MSP Underwriting/Stake in Syndicate 318

Munich Re is acquiring the UK Company MSP Underwriting Ltd. for a figure it said is in the “mid double-digit million Euro range.” MSP Underwriting Ltd. owns both the Lloyd’s managing agency Beaufort Underwriting Agency Limited, which manages the business of Lloyd’s Syndicate 318, and Lloyd’s service company Evergreen Underwriting Services Limited, which writes commercial business.

Munich Re noted that by acquiring Beaufort it will “gain access to 47.3 percent of the business of Syndicate 318.” Munich Re has reinsured Syndicate 318 since 2002.

“The acquisition enables Munich Re to broaden its business written via Lloyd’s in lines not covered by the Watkins Syndicate, an established member of the Munich Re Group that specializes in marine insurance,” said the bulletin.

Peter Röder, Munich Re Board member, who will have sole responsibility for global clients as of January 1, 2008, noted that “Syndicate 318 has a proven track record of actively managing the cycle and writing business profitably throughout it. We intend to continue on this successful course, for which we are counting on the longstanding experience and know-how of the Syndicate team.”

He described Lloyd’s business as being traditionally on the borderline between primary insurance and reinsurance. Röder also explained that the acquisition would give Munich Re “further access to Lloyd’s business. MSP Underwriting writes highly profitable short-tail property business and complements our existing portfolio perfectly.”

Michael Pritchard, Executive Director of MSP Underwriting, indicated that the firm is looking forward to a “collaboration with Munich Re. The acquisition by one of the world’s leading reinsurers creates new strategic advantages for us. Given our excellent relationship to date, Munich Re was a preferred partner for this transaction.”

MSP Underwriting focuses on international property business, but also has two smaller portfolios with commercial property and aviation insurance. The business is therefore almost exclusively of a short-tail character, i.e. with short claims settlement periods. In the financial year 2006, Syndicate 318 earned gross premiums of £137 million, (€197 million; $283 million). The Lloyd’s managing agency had a turnover of £3.5 million (€5 million; $7.23 million).

The acquisition is expected to be completed by the end of the fourth quarter 2007, once the requisite approvals have been obtained from the appropriate regulatory authorities.

Source: Munich Re – www.munichre.com

Topics Mergers & Acquisitions Excess Surplus Underwriting Lloyd's