American International Group, Inc. (AIG) has entered into an agreement to acquire Ellipse, a specialist provider of group life risk protection in the UK, from Munich Re.
The acquisition will be funded by an undisclosed cash consideration, and will be conducted via AIG Life Ltd. (AIGLL), a UK subsidiary of AIG Life & Retirement.
AIG said that Ellipse’s group protection capabilities, which include life, critical illness, and income protection products, along with its technology-enabled business model, will position AIGLL to efficiently manage group risk schemes for companies of all sizes.
Established in 2009, Ellipse is currently the 6th largest group life provider in the UK, and reached an 8% share of new business premiums and a 4% share of in-force premiums in 2017.
The company holds approximately £64 million of in-force premiums and nearly 4,500 in-force policies covering over 370,000 lives.
Kevin Hogan, Executive Vice President and Chief Executive Officer (CEO) at AIG Life & Retirement, said: “The acquisition of Ellipse reflects our disciplined approach to selectively expanding our existing Life & Retirement businesses while pursuing opportunistic growth. Ellipse brings a strong team with a scalable business platform to our well-positioned, technology-driven UK life business. We look forward to welcoming the Ellipse team to AIG.”
Adam Winslow, CEO at AIGLL, also commented: “Ellipse’s group life business is highly complementary to AIG’s existing UK Individual Protection offering. It positions us to capitalize on the strong growth potential in the UK group market by allowing us to provide a holistic suite of innovative protection products that better serve our clients and partners.
“Additionally, I’m excited to start working side by side with our Ellipse colleagues, who share a similar culture and entrepreneurial spirit, a mono-line protection focus and recognized technology leadership.
Thomas Braune, Munich Re’s Chief Executive of Life and Health Reinsurance in Europe, Latin America and the Middle East, stated: “We are glad to have found a trusted partner for this deal in AIG, pairing the right strategic fit on their side with a good opportunity for us to re-focus our UK market approach. This is a great opportunity for both sides and we are looking forward to completing this deal soon.”
Lee Lovett, CEO at Ellipse, added: “I would like to thank Munich Re for supporting the development and growth of Ellipse over the last 9 years, such that we are now recognized as a mainstream group risk insurer. We now look forward to the next exciting chapter of our growth story with our new owner, AIG Life.”
The acquisition is expected to close in the first quarter of 2019 and remains subject to regulatory approval.
Munich Re was advised in the transaction by Fenchurch Advisory Partners.