Munich Re will team up with an Australian broker network to snatch up a commercial underwriter in that country and much of its business.
The transaction is a bit complex. Munich Re, in its announcement of the deal, said it plans to handle its portion of the Calliden Group Ltd. acquisition through its primary insurance subsidiary Great Lakes Australia, or GLA. Steadfast Group, Australia’s largest broker network, will handle the other side of things.
Munich Re, the world’s biggest reinsurer, has been Calliden’s largest reinsurance partner since 2005, according to the deal announcement. GLA, meanwhile has served as insurance supporter of Calliden’s managing general agency since 2012.
Steadfast is initially buying 100 percent of Calliden and its two divisions – Calliden Agency Services Limited and Calliden Insurance Limited. The first division underwrites and distributes a range of insurance products through professional intermediaries, including home insurance, and niche coverage for expensive homes and cars. Calliden Insurance Ltd, on the other hand, makes and distributes various products through a number of underwriting agencies, the deal announcement noted.
Once Steadfast concludes its part of the deal, Munich Re will fork over $36.9 million to buy Calliden Insurance Limited. As well, Munich Re plans to snatch up the Calliden Agency portfolio to gain access to business package and middle market products that GLA already operates, and are connected to the Calliden Agency Services Limited. Munich Re said it plans to work with Calliden to build a new “business pack and commercial managing general agency ” that will service all Australian intermediaries.
If all goes well, the deal will close by the end of 2014.
It’s an interesting deal for Munich Re, which recently reported 2014 second-quarter profit that missed analysts’ estimates, thanks to belated Japan snowstorm claims.
Source: Munich Re