QBE Buying British Marine

September 27, 2005

Australia’s QBE Insurance Group today announced that it has signed an agreement to acquire the U.K.-based specialist marine insurer, British Marine Holdings Limited. The deal is expected to close before December 31, 2005, subject to regulatory approvals.

Australia’s QBE Insurance Group today announced that it has signed an agreement to acquire the U.K.-based specialist marine insurer, British Marine Holdings Limited. The deal is expected to close before December 31, 2005, subject to regulatory approvals.

The bulletin notes: “British Marine was founded in 1876 and provides Protection and Indemnity liability (P&I) and Hull and Machinery (H&M) insurance to ship owners. It insures over 8,000 small ships in more than 80 countries, through a network of over 250 brokers. Annualised gross written premium is expected to be A$175 million [U.S. $132 million]. Return on equity for the 2004/2005 financial year was 31.2 percent with a combined operating ratio of 77.9 percent. Net tangible assets are expected to be A$160 million [U.S. $121 million] at the date of completion and the purchase price is close to 1.7 times net tangible assets.”

Based on those figures QBE is paying around A$272 million (U.S. $205.6 million) for British Marine. The acquisition would be the Group’s largest so far in 2005.

QBE CEO Frank O’Halloran commented: “British Marine is an extremely well run company in the specialised small ship insurance market, which has annualised worldwide gross written premium of around A$2.5 billion [U.S. $1.9 billion]. QBE’s financial strength and network will enable British Marine to grow its business and improve capital efficiency. British Marine will also provide QBE with further distribution for its products.”

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