Munich Re is also buying a slightly smaller piece of Aon (See previous article). The world’s second largest reinsurer announced that it has concluded an agreement with Aon to acquire 100 percent of Sterling Life Insurance Company, based in Bellingham, Washington, via subsidiary Munich-American Holding Corporation.
The purchase price of $352 million (€243 million) will be paid out through Munich Re’s own funds. The transaction is expected to be completed in the first quarter of 2008, subject to required regulatory approvals and customary closing conditions.
Dr. Wolfgang Strassl, member of the Board of Munich Re for Life and HealthCare, commented: “Sterling is a target we have chosen carefully, and it perfectly contributes to the strategy we implemented in early 2006. It also further strengthens our capabilities as a global provider of integrated healthcare management.”
Sterling’s estimated 2007 total revenues are around $805 million from 155,000 members. It is a “provider of healthcare benefits to the senior (65+) and mature (50+) US citizens, with a strong presence in the growing Medicare Advantage market,” said Munich Re’s bulletin. “Its product portfolio also includes Medicare supplement and complementary products for seniors. The senior market is the fastest-growing segment of the US healthcare industry.”
Peter Choueiri, member of the International Health Board of Munich Re, noted that by acquiring Sterling Munich Re would posses “an important platform with an excellent reputation to gain access to the fast-growing senior markets in the US, and to leverage our existing business.” He said the two companies appeared to be a “perfect fit.”
Bob Trainer, President of Munich Re America HealthCare, added: “Sterling has an experienced team with a proven track record in the Medicare market. The company has a very attractive book of business, which further diversifies our existing health portfolio.”
Debbie Ahl, Sterling Life’s President and CEO seemed enthusiastic about the deal as well. She indicated that the “combination will allow Sterling members to benefit from the wide range of capabilities within Munich Re and creates more opportunities to develop the Sterling brand.” She also noted that by becoming, part of Munich Re Sterling could look forward to expanding its business.
Source: Munich Re – www.munichre.com