The main M&A story of 2020 was more of a global than a national story, but it attracted more readers in each geographic location than any other. Since it was first announced in March, the proposed merger between Aon and Willis has remained the main merger and non-merger insurance story throughout the year. But there were also other proposed and completed transactions that caught the attention of Insurance Journal's national audience. Here are the M&A reports that were of most interest to readers of National News in 2020:
Aon is going to buy Willis Towers Watson
Global insurance brokers Aon and Willis Towers Watson announced in March that they had agreed to merge in an all-equity transaction with an implied combined share value of approximately $ 80 billion. Upon completion of the combination, Aon's existing shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis. According to S&P, Aon plans to partner with Willis in an all-stock transaction worth approximately $ 30 billion, exchanging Willis stock for Aon stock. The combined company will be named Aon. Combined, the companies have more than $ 20 billion in revenue. Aon reported $ 11 billion in revenues with $ 2.2 billion net income for 2019, compared to $ 9 billion in revenues and $ 1.4 billion net income for Willis Towers Watson. Aon will maintain its headquarters in London, United Kingdom. The parent company is incorporated in Ireland. The combined company will have 95,000 employees worldwide, with what it said will be a "significant presence" in Chicago, New York and Singapore. John Haley will assume the role of Executive Chairman with a focus on growth and innovation strategy. The combined company will be led by Greg Case and Aon Chief Financial Officer Christa Davies. The board of directors will consist of proportional members of the current directors of Aon and Willis Towers Watson. In December, Aon confirmed that the European Commission has begun a review of the proposed merger. Aon said the review is a common next step "for a transaction of this size and complexity" and said it is on track to close the deal in the first half of 2021.
Allstate buys National General for $ 4 billion, Growing Auto, Independent Agent Business
The American insurer Allstate Corp. National General Holdings Corp. for about $ 4 billion in cash, expanding its auto insurance business at a time when the coronavirus has crushed road traffic and reduced claims. The deal announced in July implies a total deal value of $ 3.92 billion and a premium of $ 3.92 billion, calculations by Reuters showed. The New York-based National General provides personal and commercial auto, homeowner, umbrella, recreational vehicles, motorcycles, lenders, supplemental health, and other niche insurance. Auto insurance accounts for about 60% of the premium with a significant presence in the non-standard automotive market. "The acquisition of National General accelerates Allstate's Illinois-headquartered strategy to increase market share in personal property liability and significantly expands our distribution of independent agents," said Tom Wilson, Allstate Chief Executive Officer. National General has approximately 42,300 independent agents. Allstate becomes one of the top five personal lines providers in the independent agent distribution channel by combining Encompass and Allstate & # 39; s Independent Agent businesses with National General.
In a first, State Farm to acquire Texas non-standard auto insurance company GAINSCO
State Farm Mutual Automobile Insurance Co. acquires a non-standard Dallas auto insurer, GAINSCO, in a $ 400 million cash transaction in September. It is the first time in State Farm's 98-year history that it has acquired an insurance company. GAINSCO specializes in minimum limits on personal car coverage and actively distributes its non-standard personal car products through independent retail agents in Arizona, Florida, Georgia, New Mexico, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, Ohio and Alabama. Its insurance business is conducted through its subsidiary, MGA Insurance Company Inc., a Texas corporation.
Tokio Marine Completes Acquisition of Pure Group
Tokio Marine Holdings announced in February that it had completed the acquisition of New York-based Privilege Underwriters Inc. and its subsidiaries, known as Pure Group, which specializes in the high net worth US insurance market. The purchase price was $ 3.1 billion (approximately JPY 325.5 billion). The deal was completed through Tokio Marine & # 39; s 100% subsidiary HCC Insurance Holdings, Inc. Tokio Marine acquired 100% of the shares of Privilege Underwriters Inc. from existing shareholders, including Stone Point (51%), KKR (34%), AXA XL (10%), Pure management and others (5%). For 2018, Pure reported a consideration of $ 229 million, pre-tax profit of $ 73 million and $ 963 million in premiums under management. The company profile consists of homeowners (57%), car (23%), inland shipping (9%) and other lines for high net worth customers.
Zurich and farmers agree to buy MetLife & # 39; s US P / C business for $ 3.94 billion
Zurich Insurance and Farmers Exchanges agreed in December to buy MetLife's US property and accident business for $ 3.94 billion, the insurers said, in an environment where the COVID-19 pandemic has made auto and home insurance companies more profitable. The Swiss insurer is contributing $ 2.43 billion to the deal through its Farmers Group Inc (FGI) unit, while the Farmers Exchanges will contribute $ 1.51 billion. The deal gives Farmers Exchanges, to which FGI provides administrative and management services, a nationwide presence in the US and access to new distribution channels.
ProAssurance appears to be acquiring NORCAL in a $ 450 million deal
In February, health insurance company ProAssurance Corp. agree to provide medical professional indemnity insurer NORCAL Mutual Insurance Co. to be acquired following the demutualization of NORCAL in a $ 450 million transaction. The combination is expected to create the third largest specialist liability insurance writer for healthcare providers and institutions in the country. Based in Pennsylvania, NORCAL writes in 39 states. It reported $ 342 million in direct written premiums in 2018 and $ 50 million in net profit. Underwriting performance and overall profitability of the company "recently deteriorated sharply as a result of a significantly unfavorable reserve development," said Fitch Ratings, which negatively posted its "A" ratings for ProAssurance after announcing the deal. Headquartered in Birmingham, Alabama, ProAssurance serves more than 54,000 health care providers in 49 states. The company had gross written premiums for medical professional liability of approximately $ 475 million on an annual basis.
Ryan Specialty Group and All Risks complete merger
Specialist insurance brokers Ryan Specialty Group and All Risks completed the merger of the two firms to form Ryan Specialty Group in September. The deal unites Chicago-based Ryan Specialty Group and its nearly $ 12 billion premium, and All Risks, headquartered in Delray Beach, Florida, which has nearly $ 2.6 billion in premium. The combination has approximately 3,300 employees and more than 70 offices in the United States, the United Kingdom and Europe. Only AmWINS and CRC Insurance Services are bigger than RSG and All Risks in the wholesale brokerage.
Travelers acquiring Plymouth Rock's digital agency InsuraMatch
In December, The Travelers Companies agreed to a takeover InsuraMatch, a national digital independent insurance company, of the Plymouth Rock Group of Companies. Encharter Insurance, the Massachusetts-based brokerage in Plymouth Rock, is not part of the transaction. Founded in 2014 as part of Boston-based insurer Plymouth Rock, InsuraMatch operated as an autonomous business unit. In 2019, InsuraMatch produced nearly $ 32 million in premiums. Travelers said InsuraMatch will continue to operate independently and manage all of its own partnerships with airlines.
Allied World sells majority stake in the safe of high-net-worth insurers
Fairfax Financial Holdings and its subsidiary Allied World Assurance Co. agreed in November to acquire their majority stake in Florida-based high net worth insurer Vault E&S Insurance Co. to be sold to private equity investor Cornell Capital and asset manager Hudson Structured Capital Management. Fairfax will, through Allied World, retain a 10% stake in Vault after the full cash sale. Founded in 2017, Vault is a combination of a reciprocal insurance exchange owned by the policyholder and a redundant lines company serving the high net worth market. Since initially writing business in Florida, Vault has expanded into several states, including South Carolina, New Jersey, Connecticut, and Pennsylvania.
Home Insurance MGA Hippo Completes Acquisition of Spinnaker Insurance Co..
In September, California-based Hippo, an insurtech general agent focused on home insurance, completed the acquisition of Spinnaker Insurance Co., with an expansion to other states on the board. The deal follows a multi-year partnership between the companies. Spinnaker is a New Jersey-based national property / casualty insurer, licensed to do business in all 50 states. Hippo noted that Spinnaker has been the carrier platform's largest partner since 2017. With Spinnaker and its other carrier partners, Hippo offers home insurance in more than 31 states.
Brown & Brown acquires Digital Insurance Agency CoverHound and its CyberPolicy Unit
Insurance broker Brown & Brown has acquired CoverHound, a digital property / casualty insurance marketplace, and CyberPolicy, CoverHound's small business subsidiary. California-based CoverHound launched in early 2010 and raised more than $ 112 million in venture capital over the past decade, including a $ 58 million round of funding in 2019 with lead investor Hiscox and other investors including Chubb, Aflac Ventures and MS&AD in Japan. In 2015, Chubb (then ACE) took a 24% stake in CoverHound. However, with this deal, Brown & Brown gets 100% ownership.
Amynta Group acquires bonding business from Aspen Insurance
Amynta Group, a provider of property / accident protection and warranty products and services, has acquired the underwriting business of Aspen Insurance. The company will now operate as Amynta Surety Solutions. As part of the transaction, Amynta said it will partner with Crum & Forster to provide the insurance technical capability for the business and acquire Aspen's existing bail bond portfolio. Amynta Surety Solutions will be the exclusive writer of major commercial surety bonds for Crum & Forster, according to the announcement. Amynta Surety Solutions will be headquartered in Glastonbury, Conn., And will continue under the leadership of Michael Toppi, CEO of Amynta Surety Solutions.
Paragon Completes Acquisition of Trident Public Risk Solutions from Argo
Paragon Insurance Holdings, a national general agency, said in May that it had closed the purchase of Trident Public Risk Solutions from Bermuda-based Argo Group. Trident provides insurance and risk management for public sector entities such as counties, municipalities, schools, special districts, and long-distance government agencies. It operates through a distribution network of national brokers and local agencies. It has offices in San Antonio, Texas and Springfield, Massachusetts. Paragon is headquartered in Avon, Connecticut, and writes more than 20 insurance programs, including those for arborists, ski facilities, pest control, lumber, precision manufacturing, and wineries. Paragon said the transaction positions it as one of the largest providers of commercial insurance coverage for public entities in the US.