The US insurer has agreed a €116m deal to buy Munich Re-owned MSP Underwriting, operating through Beaufort, which underwrites for Lloyd’s Syndicate 318

Cincinnati Financial has agreed to pay €116.1m (£102m) cash to buy a London market specialty subsidiary of German reinsurer Munich Re.

lloyds building

London-based MSP Underwriting operates through Beaufort Underwriting Agency, which underwrites property and aviation insurance for Lloyd’s Syndicate 318.

Future business plans call for targeted expansion into new classes of business, Cincinnati said in a statement.

The sale price agreed with Munich Re was based on MSP’s projected net asset value at closing, the US insurer added.

Lloyd’s Syndicate 318 underwrote approximately £153m of gross written premiums in 2017.

Its new owner Cincinnati underwrote $4.95bn gross premium, encompassing a mix of commercial, motor and home insurance business across 42 US states last year.

“Adding MSP Underwriting to the Cincinnati family brings experienced underwriters who we believe will open opportunities for us to support our agents in new geographies and lines of business,” said Steven Johnston, Cincinnati’s president and CEO.

“And, it complements our existing large commercial account, excess and surplus lines, high net worth personal lines and reinsurance assumed growth initiatives,” Johnston added.

Cincinnati, which was advised by US legal firm Sidley Austin, said MSP would continue to operate under its own brand with its existing leadership team in place.

Peter Röder, member of Munich Re’s management board, commented: “After the sale, Munich Re will have a focused and less complex set-up in order to drive profitable growth within the Lloyd’s market, instead of running two platforms in parallel.

“We remain committed to the Lloyd’s market, and will continue to grow the business within Munich Re Syndicate Ltd,” the Munich Re board member continued.

“Cincinnati Financial is perfectly suited for enhancing MSP Underwriting’s business and we are looking forward to seeing the company prosper within Cincinnati Financial,” Röder added.