Allianz AGCS to Sell U.S. MidCorp and Entertainment Insurance Businesses to Arch for $450 Million

Allianz AGCS to Sell U.S. MidCorp and Entertainment Insurance Businesses to Arch for $450 Million

(IN BRIEF) Allianz Global Corporate & Specialty SE (AGCS) has announced an agreement to divest its U.S. MidCorp and Entertainment insurance businesses to Arch Insurance North America for $450 million in cash. The deal includes the transfer of approximately $2 billion in loss reserves to Arch, resulting in a total transaction value of $1.4 billion for Allianz Group. Around 500 employees are expected to transition to Arch as part of the agreement. AGCS U.S. will now focus on its Large Corporate and Specialty business, capitalizing on its global expertise in underwriting, claims, and risk consulting. The transaction, subject to regulatory approvals, is anticipated to close in the latter half of 2024.

(PRESS RELEASE) MUNICH, 6-Apr-2024 — /EuropaWire/ — Allianz Global Corporate & Specialty SE (‘AGCS’), Allianz Group’s carrier for large corporate and specialty insurance, announced an agreement to sell its U.S. MidCorp and Entertainment insurance businesses, underwritten via its Fireman’s Fund subsidiaries, to Arch Insurance North America, part of Arch Capital Group Ltd. (‘Arch’), for an agreed cash payment of $450 million reflecting the franchise value of the business. The transaction includes risk transfer for Allianz, as Arch is assuming approximately $2 billion of loss reserves associated with the business. The cash payment from Arch, together with an estimated $1.0 billion of Allianz capital supporting the business, is expected to result in $1.4 billion of total transaction value for Allianz Group. Approximately 500 employees from Allianz are expected to transfer to Arch as part of the agreement.

Going forward, AGCS U.S. will focus on its Large Corporate and Specialty business, where U.S. brokers and clients benefit from Allianz’s strong global and industry-specific capabilities across underwriting, claims, and risk consulting, including multinational insurance programs and alternative risk transfer.

“This strategic step for our U.S. business allows us to leverage our strengths in these important market segments, where we have deep expertise in addressing our clients’ most complex risks,” said Tracy Ryan, AGCS Chief Executive Officer for North America and member of AGCS’s Board of Management. “We are proud of our employees who have served our U.S. MidCorp and Entertainment clients and brokers over the years. We are confident that they will be a strong addition to Arch, ensuring continuity for our partners.”

The businesses subject to sale are underwritten by Fireman’s Fund Insurance Company and its subsidiaries, namely American Automobile Insurance Company, Chicago Insurance Company, Interstate Fire & Casualty Company, and National Surety Corporation and collectively totaled $1.7 billion of gross premium written in 2023

Subject to regulatory approvals, this transaction is expected to close in the second half of 2024.

About Allianz Commercial

Allianz Commercial is the center of expertise and global line of Allianz Group for insuring mid-sized businesses, large enterprises and specialist risks. Among our customers are the world’s largest consumer brands, financial institutions and industry players, the global aviation and shipping industry as well as family-owned and medium enterprises which are the backbone of the economy. We also cover unique risks such as offshore wind parks, infrastructure projects or Hollywood film productions. Powered by the employees, financial strength, and network of the world’s #1 insurance brand, we work together to help our customers prepare for what’s ahead: They trust on us for providing a wide range of traditional and alternative risk transfer solutions, outstanding risk consulting and Multinational services as well as seamless claims handling. Allianz Commercial brings together the large corporate insurance business of Allianz Global Corporate & Specialty (AGCS) and the commercial insurance business of national Allianz Property & Casualty entities serving mid-sized companies. We are present in over 200 countries and territories either though our own teams or the Allianz Group network and partners. In 2023, the integrated business of Allianz Commercial generated around €18 billion in gross premium globally.

About Arch Insurance North America

Arch Capital Group Ltd. (Nasdaq: ACGL) is a publicly listed Bermuda exempted company with approximately $21.1 billion in capital at Dec. 31, 2023. Arch, which is part of the S&P 500 Index, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary note regarding forward-looking statements

This document includes forward-looking statements, such as prospects or expectations, that are based on management’s current views and assumptions and subject to known and unknown risks and uncertainties. Actual results, performance figures, or events may differ significantly from those expressed or implied in such forward-looking statements.

Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general economic and competitive situation in the Allianz’s core business and core markets, (ii) the performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) adverse publicity, regulatory actions or litigation with respect to the Allianz Group, other well-known companies and the financial services industry generally, (iv) the frequency and severity of insured loss events, including those resulting from natural catastrophes, and the development of loss expenses, (v) mortality and morbidity levels and trends, (vi) persistency levels, (vii) the extent of credit defaults, (viii) interest rate levels, (ix) currency exchange rates, most notably the EUR/USD exchange rate, (x) changes in laws and regulations, including tax regulations, (xi) the impact of acquisitions including and related integration issues and reorganization measures, and (xii) the general competitive conditions that, in each individual case, apply at a local, regional, national, and/or global level. Many of these changes can be exacerbated by terrorist activities.

No duty to update

Allianz assumes no obligation to update any information or forward-looking statement contained herein, save for any information we are required to disclose by law.

Media Contacts:

Global/London:
Hugo Kidston
Tel: +44 7881 803690
hugo.kidston@allianz.com

Munich:
Philipp Keirath
Tel: +49 160 98 234 385
philipp.keirath@allianz.com

New York:
Jo-Anne Chasen
Tel. +1 917 826 2183
jo-anne.chasen@agcs.allianz.com

SOURCE: Allianz SE