Acquisition creates specialty risk powerhouse

Acquisition

Ireland-based XL Group is expecting to reap the rewards of increased scale after acquiring Catlin Group.

The global speciality insurer and reinsurer finalised an agreement with Catlin earlier this month, which will lead to the creation of a single firm with about $US10 billion in net premium, to be known as XL Catlin.

XL CEO Mike McGavick says the acquisition will offer a substantial boost to XL’s ability to manage complex risks.

“We believe the transaction will accelerate each company’s strategy, and address the meaningful structural changes we see shaping the [property and casualty] sector,” he says. 

“Specifically, the combination will add immediate scale in specialty insurance, it will create a more efficient and more capable global network by bringing our two infrastructures together, and it creates a top 10 reinsurer with expanded alternative capital capabilities.

Catlin CEO Stephen Catlin will remain with the combined company to serve as Executive Deputy Chairman, and is expected to join the XL board.

Together, the combined entity will be a market leading global specialist and property catastrophe insurer which will be far better positioned to respond to the changing dynamics that are impacting the broader insurance and reinsurance markets,” Catlin says. 

“We expect the enlarged business to benefit from increased diversification, significant further economies of scale, strengthened franchises in each of its markets and an improved standing with intermediaries.

“As a result, XL Catlin will be better equipped to serve its clients across a range of distribution channels and geographies with an enhanced suite of capabilities and products.”