British Aviation Insurance Group acquired US-based Associated Aviation Underwriters for an undisclosed sum this week, citing the need to match the emergence of global airline alliances.
The acquisition will create the aviation market's largest risk carrier with a forecast premium income totalling £465m when, as expected, it receives US regulatory approval in September.
Tony Medniuk, chief executive of BAIG, said: "The key driving factor for this acquisition has been the changing basis of the airline industry. Airlines are increasingly forging global alliances and this is giving rise to different business leads which require a global response."
Medniuk added that its acquisition of AAU, which has its headquarters in New Jersey, would bolster BAIG's interests in the US market. Its premium income last year at £233m was almost equal to that of BAIG's.
He said: "The symmetry between the two businesses is excellent. We wanted a US portfolio since we are a market leader in the rest of the world."
AAU is a leading player in three key areas of the US market; airline insurance, manufacturing and general aviation insurance.
The deal will enable BAIG, the lead re-insurer of Air France's Concorde fleet, to add Chubb and CNA to its existing pool of Munich Re, Zurich Financial Services, Tokyo Marine and Mitsui.
BAIG's two foremost shareholders are Royal & SunAlliance and CGNU.
AAU chief executive Dan Izard said the acqusition is a logical step towards a truly global aviation insurance market.