AIG Finalizes Acquisition of Program Manager Glatfelter Insurance

Article

American International Group said it has completed the acquisition of insurance program manager Glatfelter Insurance Group, a deal announced in September.

The addition is a key element in AIG’s strategy to reposition its General Insurance business and return to profitability.

“Glatfelter’s strong underwriting culture and deeply experienced management team with expertise in North American programs will help us deliver sustainable, profitable growth as we continue to build value for our stakeholders,” said Brian Duperreault, president and chief executive officer of AIG.

“Glatfelter is a terrific strategic fit for us,” said Peter Zaffino, AIG’s CEO for General Insurance, who last week said Glatfelter will help AIG reposition its existing U.S. program business, 50 percent of which the insurer is currently non-renewing.

Glatfelter serves approximately 3,000 brokers and 30,000 insureds in the U.S. and Canada with multiple niche programs. Glatfelter’s divisions include a Public Practice (public entities, including water entities, municipalities and educational institutions); a Healthcare Practice (hospices, assisted living and senior living facilities and, home healthcare providers) and a Religious Practice (churches, synagogues, temples, mosques and other religious organizations). Glatfelter also has programs for emergency responders, private ambulance companies and benefit plans for public entities, schools and nonprofits.

Glatfelter Insurance Group also operates two retail insurance agencies: The Glatfelter Agency in York, Pennsylvania, and The Insurancenter in Joplin, Missouri.

The two firms are not strangers. Glatfelter has been doing program business with AIG for 40 years, according to Tony Campisi, chief executive officer of Glatfelter Insurance Group.

Upon closing, Campisi will report directly to David McElroy, CEO of AIG General Insurance’s Lexington surplus lines company.

The deal has caught the industry’s attention.

Speaking at last week’s Target Markets Program Administration Association’s conference, Pat Ryan, founder and CEO of Ryan Specialty Group and former CEO of Aon, wondered if AIG’s acquisition of Glatfelter will “make a new strategic statement of carriers buying up MGUs.”

Ryan said he has had carriers ask him if moves like the AIG/Glatfelter acquisition will be something that happens on a continuing basis, and whether carriers feel they better “get into the game.”

“Stay tuned on that … it impacts everybody in this room. It certainly impacts [RSG],” he said.

M&A History

In 2015, AIG acquired a stake in NSM Insurance Group, another Pennsylvania-based program manager, from ABRY Partners and NSM management.

The AIG-Glatfelter deal is part of a continuing consolidation in the industry. At a time when Marsh & McLennan is buying broker JLT and AXA is absorbing XL, there have been a number of specialty insurance deals in just the past few months.

At the specialty insurer level, The Hartford Financial Services Group is in the process of acquiring The Navigators Group in a transaction that values Navigators at approximately $2.1 billion. Chicago-based insurer Kemper Corp. closed on its $1.6 billion acquisition of nonstandard auto insurer Infinity Property and Casualty Corp.

There has also been recent activity in the specialty brokerage sector: Worldwide Facilities acquired Gerald J. Sullivan & Associates and is also acquiring McClelland and Hine Inc. of San Antonio. EPIC Insurance Brokers and Consultants acquired New York-base Vanbridge. Arthur J. Gallagher acquired United Dealer Services of New York. Texas-based Higginbotham acquired Colt Risk Management Services, which specializes in aviation risk. Ryan Specialty Group bought certain assets of ARC Specialty Brokerage, a division of ARC Excess & Surplus in new York. Risk Strategies acquired Cincinnati Intermediaries.