Arch rises on $450 mln deal to buy Allianz’s some US insurance businesses

Arch Capital

05/04/2024 17:29

** Shares of insurer Arch Capital Group  ACGL.O  rise 3.6%
to $94.38
    ** ACGL's North American insurance unit agrees to buy German
insurer Allianz Global Corporate & Specialty SE's  ALVG.DE  U.S.
midcorp and entertainment insurance businesses for $450 mln in
cash
    ** Deal will help expand ACGL's footprint in the middle
market segment - companies smaller than multinational
corporations but larger than typical small businesses - in the
U.S.
    ** ACGL assuming $2 bln of loss reserves associated with the
business and estimates $1.40 bln capital requirement to support
it
    ** About 500 employees of Allianz expected to move to Arch
Insurance North America as part of the deal, which is expected
to close in the second half of 2024
    ** Nearly $1 bln of Allianz capital will support the
business bringing the total deal value to $1.40 bln for Allianz
Group
    ** Going forward, Allianz will focus on its U.S. large
corporate and specialty insurance business
    ** ACGL shares up 26.7% YTD

 (Reporting by Arasu Kannagi Basil in Bengaluru)
 ((ArasuKannagi.Basil@thomsonreuters.com;))