Liberty Mutual to acquire Ironshore; CEO calls deal a win-win for all parties

Liberty Mutual has agreed to acquire Ironshore – just over a year after Fosun International, China’s biggest conglomerate, acquired the remaining 80 percent stake in the Bermuda-based property/casualty insurer.

Kevin Kelley, the chief executive of Ironshore, said the deal represents a win-win for all three parties after what has been a period of uncertainty for the company.

Since it acquired Ironshore, Fosun has grappled with the way in which rating agency AM Best has viewed the deal, specifically the high level of debt leverage it ended up with. Earlier this year, Fosun had been looking to complete an initial public offering (IPO) of the company; now, it appears to have decided a complete sale is the best way forward.

Liberty Mutual will acquire a 100 percent ownership interest in Ironshore via a stock purchase agreement believed to be worth around $3 billion pending closing price adjustments.

“Today’s announcement of the transaction is beneficial for all three parties involved and is the culmination of a careful and considered process. We have aimed for the best possible outcome for our employees, clients and business partners and are confident this transaction achieves these goals and more,” said Kelley.

“The combination of Ironshore and Liberty Mutual is a win-win proposition and creates value for both companies. Ironshore will become part of another ‘A’ rated company with a global reach, a strong balance sheet, wide client base and a much greater capacity to drive profitable growth.

“In Ironshore, Liberty will gain access to a profitable specialty insurer that will enhance Liberty’s current specialty markets profile. The transaction also speaks to the value of the Ironshore franchise and to Liberty’s view of the value that the management team brings to their organization.

“For our producers and clients, our value proposition becomes even more compelling. Liberty, like Ironshore, has a strong AM Best rating of 'A'. With more than $120 billion of assets, Liberty Mutual is a global Fortune 100 company with an 'A' rating from A.M. Best, S&P and Moody’s that gives us access to a larger balance sheet, additional product lines and greater reinsurance and underwriting capacity.

“As part of Liberty Mutual, Ironshore will continue to operate separately under our current model, brand and leadership but as an even stronger specialty lines carrier with access to Liberty’s full range of resources.”

David Long, Liberty Mutual Insurance chairman and CEO, added: “We are pleased to have Ironshore and its proven management team led by CEO Kevin H. Kelley join Liberty Mutual.

“Ironshore has a track record of profitably underwriting global and diverse specialty risks insurance and is an ideal complement to Liberty Mutual, providing additional scale, expertise, innovation and market relationships to our $5 billion global specialty business.”

Ironshore was founded in December 2006 with over $1 billion in private equity capital to capitalize on opportunities in the specialty property and casualty insurance industry.

In February 2015, Fosun International Limited and its subsidiaries acquired an initial 20 percent ownership interest in Ironshore. In November 2015, Fosun acquired the remaining 80 percent ownership interest in Ironshore.