Bermuda-based Arch Capital Group, through its subsidiary Arch Insurance Europe, has agreed to acquire Ardonagh Group’s UK Commercial Lines business for a consideration of up to £31m.
The UK commercial managing general agent (MGA), being sold by the British insurance broker to Arch Capital, is a part of its Geo Underwriting business.
Ardonagh will retain Geo Underwriting’s Personal Lines, Private Clients and Specialty and Agriculture brands AIUA and BIBU.
The insurance broker will use the proceeds from the sale of UK Commercial Lines for further investment in the group. In late September, Ardonagh signed a deal to acquire personal lines insurance broker Swinton Group from Covéa Group for approximately £165m.
The asset-only deal with Arch Capital will include the renewal rights for Fusion, Arista and Towergate Commercial Underwriting, which registered over £150m of gross written premium last year.
Ardonagh CEO David Ross said: “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.”
For Arch Insurance Europe, the transaction will help it gain a meaningful presence and an extended office network in the UK to complement its existing London Market business.
Arch Insurance Europe president and CEO Matt Shulman 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.”
In a separate deal, Arch Capital will acquire US-based specialized risk assessment and insurance provider McNeil & Company for an undisclosed price.
Arch Capital said that the specialized insurance provider will operate independently and retain its headquarters in Cortland, New York as an affiliate of Arch Insurance Group (US).
With close to $11.02bn in capital as of 30 June 2018, Arch Capital provides insurance, reinsurance and mortgage insurance across the world through its subsidiaries.