Munich Re announced that it has successfully concluded the acquisition of specialty insurer HSB Group from US insurer AIG for $739 million (€555 million). The deal was originally announced last December
Munich Re said the transaction “was formally completed on 31 March 2009. The purchase price in cash was financed by Munich Re from internal resources. All the requisite approvals have now been obtained from the relevant authorities.”
“The core of the HSB Group is Hartford Steam Boiler Inspection and Insurance Company (HSB), one of the largest insurance and inspection companies specializing in engineering risks in the US. HSB is a leading worldwide provider of equipment breakdown and engineered lines of insurance, other specialty coverages, and inspection, certification and engineering consulting services.”
The Group’s equity capital as of December 31, 2008 amounted to around $586 million, and its gross written premium income for 2008 totaled $930 million.
A.M. Best Co. released a comment indicating that the ratings of, The Hartford Steam Boiler Group and its members “remain under review with positive implications, pending completion of the review of the acquisition of HSB Group, Inc. by Munich Reinsurance Company.”
Best noted that when the deal was announced it had “placed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of HSB Group under review with positive implications.” Best said thisaction reflects its “view that the acquisition by Munich Re will likely have a favorable outcome relative to HSB Group’s ratings.”
Peter Röder, Munich Re’s member of the Board of Management responsible for business in North America, commented: “With the acquisition of the HSB Group, we are continuing as planned to expand our position in the US in specialty insurance niche segments. This is part of our strategy to grow profitably in the US, the world’s most important insurance market.”
Tony Kuczinski, CEO of Munich Re America, noted that “HSB will be managed with Munich Re America as a standalone business.” he added that he looked forward to the arrnagment, and was “pleased to welcome a highly experienced and committed management team as well as such outstanding staff”.”
HSB’s President and CEO Doug Elliot added: “Our partnership with Munich Re will open new opportunities for HSB to create value for our clients and grow our business in the U.S. and around the globe. With Munich Re’s financial strength and added resources behind us, we look forward to continued profitable growth.”
ources: Munich Re – www.munichre.com and A.M. Best Co. – www.ambest.com
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