Ardonagh sells UK commercial MGA business to Arch for £31m

After  selling the claims business of Direct Group for £36 million earlier this month, UK intermediary Ardonagh Group has revealed that it is selling its commercial managing general agency (MGA) businesses to Arch UK Holdings for up to £31 million.

The transaction is an asset-only deal that includes the renewal rights for Fusion, Arista and Towergate Commercial Underwriting, generating more than £150 million of gross written premium in 2017 and focused on writing commercial property, casualty, motor, professional liability, personal accident and travel.

Approximately 250 employees will move to Arch as a result of the transaction. Geo Underwriting’s personal lines, private clients, specialty and agriculture brands AIUA and BIBU will remain a part of The Ardonagh Group.

Ardonagh said the proceeds of the sale will be used for further investment in the group, while Arch is looking to grow its regional UK presence and extend its network in the London Market with this purchase.

“Almost 18 months after the creation of the Group, we now find ourselves looking across our portfolio and assessing where we can drive organic growth from leading positions," said Ardonagh Group CEO David Ross.

“For us, an MGA is most effective in niche and specialist areas. While we’ve undertaken strategic remediation actions within our commercial MGA lines over the past two years and worked with carriers to improve loss ratios, these books now fall outside that strategy and we believe are best placed to succeed within an insurance company. Arch therefore provides the perfect platform from which to drive these businesses forward.”

Matt Shulman, president and CEO of Arch Insurance Europe, said: “We have a clearly stated strategy to build out our distribution capabilities across the UK and Europe and the acquisition of Geo’s commercial lines business represents an important step in this process, building upon the success of the earlier acquisition of Axiom Underwriting.”

“By expanding our regional presence with the addition of nine offices we immediately gain scale and presence in our target markets and we can deliver a broader range of specialist insurance solutions through a network of over 2,000 brokers. We are gaining a well-respected and highly experienced team of underwriting and distribution professionals who are perfectly placed to help us build a significant and sustainable business that can meet the growing needs of its clients," Shulman added.

Paul Dilley, CEO of Geo Underwriting, commented: “The Group remains committed to our niche businesses in personal lines, agriculture, and UK specialty markets where our offerings from Geo Underwriting and its partners remain market leading. In Arch, our commercial MGA brands have found the ideal home, a renowned global insurer brand with a strategy focused firmly on future growth and expansion into new markets.”

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