US-based property and casualty insurance provider Cincinnati Financial has agreed to acquire Munich Re’s subsidiary MSP Underwriting for £102m.
MSP Underwriting is a London-based specialty underwriter that operates through Beaufort Underwriting Agency, which underwrites for Lloyd’s Syndicate 318.
The Syndicate has written nearly £153m in 2017 annual gross written premiums. MSP Underwriting, which focuses on international property business, also has two smaller portfolios with commercial property and aviation insurance.
Upon completion of the transaction, MSP Underwriting will continue to operate under its own brand with the same leadership team in place.
Cincinnati Financial president and CEO Steven Johnston said: “Adding MSP Underwriting to the Cincinnati family brings experienced underwriters who we believe will open opportunities for us to support our agents in new geographies and lines of business. And, it complements our existing large commercial account, excess and surplus lines, high net worth personal lines and reinsurance assumed growth initiatives.
“Munich Re is a longtime and valuable reinsurance partner. We are pleased to work with them through this transaction. MSP’s size allows us to follow our proven strategy of building successful insurance businesses over time – just as we have with our excess and surplus lines subsidiary and our reinsurance assumed business.”
The transaction, which is subject to regulatory approvals and other customary closing conditions, is anticipated to close in the first quarter of next year.
In 2007, Munich Re acquired MSP Underwriting to expand its business written through Lloyd’s in lines not covered by the Watkins Syndicate. The Watkins Syndicate is an established member of the Munich Re Group that specializes in marine insurance.
Cincinnati expects the transaction to generate an attractive return over a period of time and be accretive to next year’s net income.
Munich Re board management member Peter Röder said: “Cincinnati Financial is perfectly suited for enhancing MSP Underwriting’s business and we are looking forward to seeing the company prosper within Cincinnati Financial. After the sale, Munich Re will have a focused and less complex set-up in order to drive profitable growth within the Lloyd’s market, instead of running two platforms in parallel.
“We remain committed to the Lloyd’s market, and will continue to grow the business within Munich Re Syndicate.”