Arch Insurance Europe has acquired a series of Ardonagh Group-owned Commercial MGA businesses for a consideration of up to £31 million.
The agreement, which is conditional upon performance criteria, will see Arista, Fusion, Towergate Personal Accident and Travel and Towergate Commercial MGA transferred to Arch along with approximately 250 employees from these businesses and nine associated offices.
Ardonagh has said that proceeds of the sale will be used for further investment in the group.
“For us, an MGA is most effective in niche and specialist areas,” said David Ross, Chief Executive Officer of the the Ardonagh Group.
“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.”
This move is reportedly part of Arch’s strategy to grow its regional UK presence and deliver underwriting expertise and a strong customer value proposition through an expanded retail distribution network.
There is minimal overlap with the existing Arch business written in the UK and this transaction provides Arch with access to a leading regional distribution network as a key part of its strategy to build a scalable regional footprint across the UK and Europe.
“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,” said Matt Shulman, President and CEO, Arch Insurance Europe.
“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.”
