Ironshore Inc. is now 100 percent owned by the investment arm of Fosun Group, a Chinese mega-conglomerate whose backer has looked to Warren Buffett for inspiration.
Ironshore’s new owners, meanwhile, pledged to support its continued autonomy as it pursues further global growth.
“As a long-term shareholder of Ironshore, Fosun will always support the autonomous, stable and healthy development of Ironshore while fully leveraging our global insurance platform resources to enhance Ironshore’s competitiveness in the industry,” Fosun chairman Guo Guangchang said in prepared remarks.
The $1.84 billion merger, first announced in May, allowed Fosun International Ltd. to snatch up the remaining 80 percent of the Bermuda-based specialty insurer that it didn’t already own. Fosun initially bought a 20 percent stake in Ironshore back in February.
Post-merger Ironshore is now a wholly owned subsidiary of Fosun International.
Ironshore CEO Kevin Kelly said that the merger will allow his company to pursue further global expansion. Kelly noted in prepared remarks that the deal “will enable us to continue to build upon our international specialty platform and enhance our global brand.”
Kelly added that “Fosun’s financial strength and established investment management approach provides long-term strategic capital to bolster Ironshore’s expansion strategy, and further adds to Ironshore’s uniqueness.”
Meanwhile, A.M. Best maintained under review with negative implications status Ironshore’s “A” (Excellent) financial strength rating, as well as its “a” issuer credit rating. Both apply to Ironshore and its subsidiaries. A.M. Best said the assessment reflects its concerns about Fosun’s post-merger credit profile and financial leverage, “which could potentially place a strain on Ironshore’s stand-alone capitalization under certain stress scenarios.”
Fosun has pursued a number of acquisitions in recent months, including office buildings in New York and energy companies in Australia. It also has a wide range of insurance holdings and in areas including property/casualty and life insurance, reinsurance, general insurance, labor insurance and specialty insurance in major global markets. Specific companies it owns or has investments in ranges from Yong’an P&C Insurance and Pramerica Fosun Life Insurance, to Peak Reinsurance and MIG.
In the merger-closing announcement, Guo suggested further growth is coming.
“Now and in the coming year, Fosun will strengthen its integration and collaboration efforts, seeking to establish a cross-region and cross-industry global insurance and financial group,” he said. “We encourage our invested companies to collaborate wherever applicable, seeking to connect them to Fosun’s resources with our global insurance and finance platforms to enhance their competitiveness in their respective industries.”
The influx of new capital from Asia has gone well beyond Fosun. In late July, White Mountains Insurance Group agreed to sell Sirius International Insurance Group Ltd. to an arm of Shanghai’s China Minsheng Investment Corp. for about $2.2 billion.
Earlier in November, China’s Anbang Insurance Group Ltd. agreed to acquire Iowa-based Fidelity & Guarantee Life, making it one of the largest insurers by market share in fixed indexed annuity products in the U.S.
Rod Fox, CEO of the insurance broker Tiger Risk Partners, said previously that he expects more industry investments from Asia in the months to come.
“We see significant interest from Asian buyers, both Japanese and Chinese in acquiring non-Asian properties, Fox told Carrier Management at the 2015 PCI Annual Meeting in Hollywood, Fla. “There are fix to eight other major Asian buyers on the prowl [and] they will continue to come.”
Source: Fosun International