Allied World to Strengthen Specialty with LAU Acquisition
Allied World Assurance Company Holdings, AG’s (AWH) subsidiary has inked a deal to acquire Latin American Holdings Ltd. (“LAU”). The acquisition will strengthen the specialty business of Allied World. The transaction is subject to regulatory approval by the U.K. Financial Conduct Authority, though terms remain undisclosed.
Per the transaction, the underwriting teams of Latin American Holdings in the U.S. and London will also come under the umbrella of Allied World.
Latin American Holdings has been underwriting trade credit and political risk coverage exclusively for Allied World since 2010. It wrote $28.5 million of gross premiums in 2013.
Adding LAU to its portfolio hence will enhance Allied World’s offerings for short and medium-term credit and political risk coverage to exporters, importers, financial institutions, contractors and investors.
Allied World has always adopted the inorganic route to ramp up its growth profile. In October, Allied World Financial Services, Inc., another subsidiary, acquired a minority interest in Blue Vista Capital Management, LLC. In August, the company announced that it would acquire the Hong Kong and Singapore operations of Royal & Sun Alliance Insurance plc for $211 million. This acquisition would complement the company’s global specialist insurance strategy with a meaningful and larger scale in the region.
In the last reported third quarter, Allied World gave a strong performance with the bottom line outperforming the Zacks Consensus Estimate by 15.09%. This prompted an upward revision in the estimates with the Zacks Consensus Estimate rising 5% to $3.51 as most of the estimates moved north.
Allied World presently carries a Zacks Rank #2 (Buy). Other property and casualty insurers worth considering include Alleghany Corporation (Y), AmTrust Financial Services, Inc. (AFSI) and Arch Capital Group Ltd. (ACGL). All these sport a Zacks Rank #1 (Strong Buy).
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