Allianz Global Corporate & Specialty (AGCS) said it has completed the sale of the U.S. personal lines business of Fireman’s Fund Insurance Co. (FFIC) to ACE Ltd.
The sale, which closed on schedule as previously announced, is valued at $365 million and includes the renewal rights and reinsurance of existing liabilities.
The FFIC business is largely focused on high net worth clients.
Coverage for existing FFIC policyholders will continue until their policies are non-renewed at expiration in accordance with state law, at which time ACE is expected to make offers of coverage to most Fireman’s Fund policyholders, according to the announcement.
ACGS said ACE has hired more than 500 Fireman’s Fund employees. ACE Group had said it would keep most of the employees with Fireman’s Fund’s personal lines business.
According to Richard Manson, North America corporate communications chief for Allianz, Fireman’s Fund had roughly 2,100 employees total before the close of the sale. Of these, approximately 500 become ACE employees on April 2 and all others remain Fireman’s Fund employees, he said.
Allianz has been restructuring its North America business. The moves have included the integration of the FFIC commercial business into AGCS, the global industrial insurer of Allianz Group. Allianz said this integration has roughly doubled the size of AGCS in North America to $3 billion in gross written premiums and will expand AGCS’s product range, both within the U.S. market and internationally.
AGCS has named a new leadership team for the integrated company, and said it will launch a new Financial Lines range of products, including Directors and Officers, Professional Indemnity, and Errors and Omissions to complement the established Professional Liability teams coming to AGCS as part of the Fireman’s Fund commercial lines integration. This new line will be led by New York City-based Paul Schiavone.
The FFIC commercial portfolio also includes products for small and mid-size businesses, covering Farm & Ranch, Mid Corporate Property and Casualty, Small Businesses, Programs, and Crop, as well as Entertainment. AGCS will market these under the Allianz brand alongside its existing offerings to large corporate and specialty products that include Property, Casualty, Construction, International Insurance Programs, Energy, Aviation and Marine. They will be sold using the combined FFIC/AGCS distribution network across North America.
The sale signals the end of the Fireman’s Fund brand name that has been in existence for more than 150 years. The Novato, California company was launched in 1863.
“With the sale of FFIC Personal Insurance complete, AGCS can focus on supporting our clients and business partners with our new broader range of services and solutions right across North America – and now with one face to market and one leadership team under Art Moossmann,” said Chris Fischer Hirs, CEO of AGCS SE. Moossmann is CEO of AGCS North America.
ACE gains renewal rights for new and existing business, reinsurance of all existing reserves, and access to a network of about 1,100 agents and brokers.
Juan Andrade, an executive vice president and head of ACE Group’s personal lines and small business insurance, said when the Fireman’s Fund deal was first announced that the blending of ACE and Fireman’s Fund businesses is highly complementary in terms of geographic locations, service, underwriting and claims services.
ACE and its Private Risk Services division are already established in the high net worth personal lines market.
“High net worth personal lines remains a strategic growth area for ACE and ACE Private Risk Services has quickly established itself in this space,” said Evan G. Greenberg, chairman and CEO, ACE Limited, when the deal was announced. “The addition of the personal lines business of Fireman’s Fund will reinforce and advance ACE’s position as a premier provider of insurance to the high net worth market.”
In 2007, ACE acquired the high net worth business of Atlantic Mutual.
In related news, ACE Private Risk Services on March 31 opened a high net worth personal insurance office in Canada. The business will serve Canadians as well as Americans and other foreign citizens with properties in Canada.
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