Allianz Global Corporate & Specialty SE (AGCS), Allianz Group’s carrier for large corporate and specialty insurance, has announced it is to focus on U.S. Large Corporate and Specialty insurance with the sale of its U.S. MidCorp and Entertainment insurance businesses, to Arch Insurance North America.
AGCS has agreed to sell the businesses, underwritten by Fireman’s Fund Insurance Company and its subsidiaries, to Arch for an agreed cash payment of $450 million.
The transaction includes risk transfer for Allianz, as Arch is assuming approximately $2 billion of loss reserves associated with the business.
All together, the cash payment from Arch, along with an estimated $1.0 billion of Allianz capital supporting the business, is expected to result in $1.4 billion of total transaction value for Allianz Group.
According to the announcement, approximately 500 Allianz employees are expected to transfer to Arch as part of the transaction.
Going forward, the company stated, AGCS U.S. will focus on its Large Corporate and Specialty business, as part of its Allianz Commercial strategy.
“This strategic step for our U.S. business allows us to leverage our strengths in these important market segments, where we have deep expertise in addressing our clients’ most complex risks,” said Tracy Ryan, AGCS Chief Executive Officer for North America and member of AGCS’s Board of Management.
He added: “We are proud of our employees who have served our U.S. MidCorp and Entertainment clients and brokers over the years. We are confident that they will be a strong addition to Arch, ensuring continuity for our partners.”
The transaction is estimated to close in the second half of 2024 and is subject to regulatory approvals.
