Allianz to sell Fireman’s Fund personal insurance business to ACE, completing future positioning for P&C business in US
Allianz progresses final element of US property & casualty business reconfiguration
Integration of Fireman’s Fund commercial lines into AGCS creates focus on commercial P&C insurance under Allianz brand
New run-off carrier, San Francisco Re, to manage legacy Fireman’s Fund business
PRESS RELEASE - Munich/Novato. December 18, 2014
Allianz SE and ACE Limited today announced a definitive agreement by which Allianz Group is to sell the Fireman’s Fund personal lines insurance business in the United States, focused on high net worth customers, to ACE for USD 365 million by means of renewal rights arrangement*. The move follows the decision by Allianz earlier in 2014 to reposition its property & casualty (P&C) insurance business in the US by integrating the Fireman’s Fund Insurance Company (FFIC) commercial business into Allianz Global Corporate & Specialty (AGCS), the global industrial insurer of Allianz Group.
This sale allows Allianz to focus on building its commercial P&C business across North America under the Allianz brand, creating a business with combined revenues that are expected to total over USD 3 billion, based on gross premiums written in 2013. The new leadership team for this combined FFIC/AGCS business was announced on December 12, with AGCS Board Member Art Moossmann becoming CEO & President of both AGCS North America (AGCS NA)** and FFIC beginning January 1, 2015.
The FFIC commercial business will be integrated into AGCS NA, with all active product lines moving to AGCS. This ensures continuity of service for existing commercial policyholders and agents, while also presenting one brand and team to customers across all segments of the US P&C market. AGCS will also seek to build on the FFIC product range globally, targeting opportunities to use FFIC’s specialist knowledge of entertainment and mid-corporate insurance in international markets.
In parallel, subject to legal and regulatory approval, it is the intention to ultimately separate and consolidate the legacy business of FFIC, including legacy asbestos and environment exposures, legacy worker’s compensation, and legacy construction defect liabilities, into a stand-alone company, San Francisco Re.
The Fireman’s Fund personal insurance business will be integrated into ACE’s existing high net worth personal lines business. In 2013, Fireman’s Fund had USD 891 million in personal insurance gross premiums written. The sale includes the renewal rights, reinsurance of existing liabilities, and access to an extensive network of 1,100 agents and brokers. The transaction, which is subject to legal and regulatory approval, is expected to be completed in the second quarter of 2015.
“These latest moves will complete the picture of the reconfiguration of our property & casualty insurance business in the United States with a strong footprint in commercial insurance,” said Axel Theis, incoming Member of the Board of Management of Allianz SE. “The sale of the Fireman’s Fund personal insurance business will give it a larger scale and ensure its continuity for brokers and policyholders. ACE is a highly respected global insurer with a vision to grow this business, capitalizing on its strength and strong reputation in the market. With this transaction Allianz will also gain capital efficiencies by releasing capital allocated to the personal insurance risks. In addition, we will use the proceeds to finance the restructuring of the Fireman’s Fund commercial P&C business. Taken with the creation of the new run-off carrier San Francisco Re, these measures enable Allianz to focus its energies even more strongly on successfully integrating the Fireman’s Fund commercial business into AGCS.”
The reconfiguration of its P&C business in the United States represents another step in the long history of Allianz in the country. Allianz has been providing financial services through its affiliated companies in the United States since 1896. Today, it offers world-class service in the US through its P&C carriers, Allianz Life, the credit insurer Euler Hermes, its strong asset management companies PIMCO and Allianz Global Investors and its thriving assistance business. At the end of 2013, in the United States the Allianz Group employed some 9,000 people and generated a total of some USD 21 billion in revenues.
*All subject to legal and regulatory approval
**Legal names of AGCS NA companies: Allianz Global Risks US Insurance Company, Allianz Underwriters Insurance Company and AGCS Marine Insurance Company.
Munich: Christian Kroos +49 89 3800 5043 email@example.com
Munich: Michael Matern +49 89 3800 2960 firstname.lastname@example.org
Fireman’s Fund Insurance Company
Novato: Richard Manson +1 415 899 4072 email@example.com