Allied World Assurance Company Holdings, AG (AWH) closed the buyout of Latin American Underwriters Holdings Ltd. (“LAU”). With this acquisition, the property and casualty insurer also announced an in-house trade credit insurance platform. Latin American Underwriters has been underwriting trade credit insurance and political risk coverage only for Allied World since 2010 with about $28.5 million of gross premiums written in 2013. The transaction was announced last year in mid November.
The underwriting teams of Latin American Holdings in the U.S. and London will come under the umbrella of Allied World.
Adding LAU to its portfolio will thus enhance Allied World’s short and medium-term credit and political risk coverage to exporters, importers, financial institutions, contractors and investors. The insurance coverage will be limited to $25 million per obligator/guarantor, and for credit terms of up to five years.
The acquisition strengthens Allied World’s hold over the specialty segment and helps it cater to the insurance needs of the customers operating globally.
Allied World has earlier also travelled the inorganic route to ramp up its growth profile. Last year, the Zacks Rank #3 (Hold) insurer announced a couple of acquisitions. One of these was the buyout of a minority interest in Blue Vista Capital Management, LLC by the company’s subsidiary – Allied World Financial Services, Inc. – in October. The other was the company’s takeover of the Hong Kong and Singapore operations of Royal & Sun Alliance Insurance plc in August.
Acquisitions are a well-accepted strategy for growth among insurers. Recently XL Group plc (XL) inked a deal to buy Catlin Group Limited (CGL.L) for about $4.1 billion. Early this month, HCC Insurance Holdings Inc. (HCC) closed the buyout of Producers Ag Insurance Group, Inc. from CUNA Mutual Group. Also, The Progressive Corporation (PGR) inked a deal last month to buy the majority stake in ARX Holding Corp., the parent company of American Strategic Insurance) and its affiliates.
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