Deal includes nearly $100m of personal motor renewal rights
Bermudan reinsurer Maiden Holdings has entered into a definitive agreement to acquire the majority of the reinsurance-related infrastructure, assets and liabilities of UK-based firm GMAC International Insurance Services.
The deal includes renewal rights on nearly $100m of predominantly personal auto quota share reinsurance as well as the supporting business development subsidiaries in Europe.
The transaction also includes the assumption of more than $100 million of loss reserves and net unearned premiums which will be funded by a transfer of cash and investments. GMAC International Insurance Services, Ltd., primarily focuses on providing branded auto and auto-related insurance products through its insurer partners to retail customers in the European Union and other global markets.
Maiden plans to fund the proposed transaction through its existing capital base. The firm expects to close the deal by the end of the third quarter, subject to regulatory approval.
The company expects the transaction to be accretive to 2011 earnings, and to generally perform within its overall stated targets of a 96% combined ratio and medium-term return-on-equity target of 15%.
"This opportunity is consistent with our disciplined, low volatility model and will allow us to further leverage our Bermuda underwriting platform,” said Art Raschbaum, president and CEO of Maiden Holdings, in a statement. “Once integrated, we expect the renewal portfolio to generate operating performance consistent with Maiden's overall objectives. We are confident that our relationship-oriented, value-added focus will enable us to further expand this strong platform and continue to make progress toward delivering on our stated profitability and return goals in 2011 and beyond.”