Lloyd's insurer acquires specialist life and health underwriting agency.

Beazley Group has continued to diversify its specialist portfolio with the acquisition of Momentum Underwriting Management (Mum) in a deal worth over £20m.

Mum, established in 2000, is a specialist personal accident and life underwriting agency based in London with an office in Australia.

The deal will comprise of an up front payment of £8.2m on completion funded through the insurer’s internal cash resources. Further instalments of up to £12.4m will be made between 2012 and 2014. This would bring the total value of the deal to £20.6m.

Mum will continue as an agency with Beazley’s share of the business being underwritten by two new Lloyd’s syndicates. The transaction is subject to the approval of Lloyd’s and the FSA.

Chris Branch, chairman and managing director of Mum, said: “We look forward to working with Beazley to enhance and develop our current product offering. This exciting development provides an excellent platform for future growth.”

For the financial year ended 31 December 2007, Mum reported audited consolidated profit before tax of £0.5m and gross assets of £2.6m. Mum plans to underwrite $100m (£54m) of gross premium in 2009.

Beazley chief executive, Andrew Horton, said: “This acquisition reflects our ambition to continue to develop our specialist expertise in sophisticated underwriting markets and represents a strong strategic fit. It provides an excellent opportunity for Beazley to access new business that complements our existing portfolio.”

Andrew Holderness, head of the Corporate Insurance Group at Clyde & Co, which advised Mum on the deal, commented: “One of the key drivers among underwriters at the moment is the pressure to diversify their businesses – and the key is finding good quality, well-managed businesses.”

He added: “The result is that there are still high levels of interest from acquirers seeking established underwriting businesses with strong core markets.”

Beazley’s six-month profit to 30 June 2008 was £45m compared to £60.2m for the same period last year. The insurer has also seen drops in its gross written premium, down 6% to £407.3m.