The commercial lines business of Ardonagh’s MGA Geo Underwriting has been sold
Ardonagh has sold its UK commercial lines business to Arch Insurance Europe for £31m.
The deal includes the commercial underwriting segments of Ardonagh’s MGA Geo Underwriting.
Arch stated the deal is an asset-only one that includes the renewal rights for Fusion, Arista and Towergate Commercial Underwriting, which generated £150m GWP in 2017. Around 250 employees and nine offices will move from Ardonagh to Arch in the deal.
Proceeds of the sale will be used for further investment in Ardonagh.
Ardonagh chief executive David Ross said: “Almost 18 months after the creation of the group, we now find ourselves looking across our portfolio and assessing where we can drive organic growth from leading positions.
“For us, an MGA is most effective in niche and specialist areas. While we’ve undertaken strategic remediation actions within our commercial MGA lines over the past two years and worked with carriers to improve loss ratios, these books now fall outside that strategy and we believe are best placed to succeed within an insurance company. Arch therefore provides the perfect platform from which to drive these businesses forward.”
Geo Underwriting’s personal lines, private clients, specialty and agriculture brands AIUA and BIBU remain as part of The Ardonagh Group.
Paul Dilley, chief executive of Geo Underwriting added: “The Group remains committed to our niche businesses in personal lines, agriculture, and UK specialty markets where our offerings from Geo Underwriting and its partners remain market leading.
“In Arch, our commercial MGA brands have found the ideal home, a renowned global insurer brand with a strategy focused firmly on future growth and expansion into new markets.”
In a statement Arch said the deal compliments its existing London Market business that is focused on wholesale distribution and delegated authority business, and expands its retail distribution network.
The group said there would be minimal overlap with the existing Arch business written in the UK, and would work towards its aim of delivering a broad range of SME products to broker partners.
Matt Shulman, president and chief executive of Arch Insurance Europe, said: “We have a clearly stated strategy to build out our distribution capabilities across the UK and Europe and the acquisition of Geo’s commercial lines business represents an important step in this process, building upon the success of the earlier acquisition of Axiom Underwriting.”
Shulman added: “By expanding our regional presence with the addition of nine offices we immediately gain scale and presence in our target markets and we can deliver a broader range of specialist insurance solutions through a network of over 2,000 brokers.
“We are gaining a well-respected and highly experienced team of underwriting and distribution professionals who are perfectly placed to help us build a significant and sustainable business that can meet the growing needs of its clients.
“We look forward to welcoming the new team to Arch. Our balance sheet strength and underwriting track record make us a natural home for them, and we are excited about taking the businesses forward together, under the Arch banner.”
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