Insurer Tokio Marine to purchase US peer Pure Group for $3.1bn
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Tokio Marine Agrees To Acquire PURE Affiliated Group Of Specialty Companies Acquisition Positions Tokio Marine as Major Player in United States High Net Worth Market
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The PURE Group of Insurance Companies Oct 03, 2019, 07:00 ET
NEW YORK, Oct. 3, 2019 /PRNewswire/ -- Tokio Marine Holdings, Inc. today announced it has reached a definitive agreement to acquire Privilege Underwriters, Inc. (PUI) from investors led by Stone Point Capital and KKR. PUI is the holding company for a collection of specialty companies serving the needs of high net worth individuals and families. PUI, which does business through the PURE Group of Insurance Companies (PURE Group), includes: PURE Risk Management, the attorney-in-fact for Privilege Underwriters Reciprocal Exchange (PURE); PURE Insurance Company, a Florida-domiciled stock insurance company; PURE Programs, a managing general underwriter; and Haven Art Group, a fine art services and claims management company. Each of the PURE Group companies, except the reciprocal insurance exchange, which is an unincorporated association owned by its subscribers, will become wholly owned subsidiaries of HCC Insurance Holdings, Inc.
The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the first quarter of 2020. Ross Buchmueller, President & Chief Executive Officer and founder of the PURE Group, will continue to lead the organization as an independent operating unit within the Tokio Marine Group.
The PURE Group is one of the leading writers of high net worth insurance in the United States. The company has grown organically by more than 20% in each of the past twelve years and has inforce premiums of more than $1 billion. The PURE Group creates specialized insurance solutions and offers coverages including: Homeowners; Automobile; Personal Excess Liability; Jewelry, Art & Collections; Fraud and Cyber Fraud; Watercraft; and Flood. The company is headquartered in White Plains, New York with ten offices across the United States. The PURE Group employs approximately 800 people writing business in 49 states and the District of Columbia.
"The PURE Group's member-owned model is unique and forges an alignment of interests focused on delivering a sophisticated insurance solution to carefully selected individuals. This acquisition provides unique growth opportunities and portfolio diversification for the Tokio Marine Group. We look forward to welcoming the PURE Group's management team and employees to Tokio Marine and to helping them continue to grow this business post-transaction," said Chris Williams, Senior Managing Executive Officer and Co-Head of International Business for Tokio Marine Holdings, Inc.
"Tokio Marine has a great track record of acquiring wonderful franchises and making them even better. We share a common view of culture and purpose and long-term perspective. The opportunity to continue our mission unabated with the backing of one of the world's largest insurers makes this a great marriage," added Mr. Buchmueller.
Jodi Lash, Chair of the PURE Subscribers' Advisory Committee, added, "On behalf of the PURE membership, I am excited to see a partnership that sustains and enhances the culture of PURE. The global resources and financial protection afforded by Tokio Marine will only strengthen PURE's value to the membership."
Morgan Stanley is financial advisor, Sullivan & Cromwell LLP is legal advisor, and KPMG LLP is accounting/tax advisor to the Tokio Marine Group. Skadden, Arps, Slate, Meagher & Flom LLP is legal advisor to the PURE Group.
Established in 1879 in Japan, the Tokio Marine Group undertakes Domestic Non-Life insurance, Domestic Life insurance, International business, and Financial and General businesses. With a presence in 45 countries and regions, the Tokio Marine Group ranks as one of the world's most globally diversified and financially secure insurance groups. As Japan's largest insurance group, the Tokio Marine Group is listed on the Tokyo Stock Exchange with over Yen 22.5 trillion ($203 billion) in total assets, Yen 5.4 trillion ($49 billion) of total revenues (for the year ended March 2019) and approximately 40,000 employees. Tokio Marine's major subsidiaries have financial strength ratings of "A+ (Strong)" from Standard & Poor's Financial Services LLC and "A++ (Superior)" from A.M. Best Company, Inc.
Privilege Underwriters Inc. (PUI) was founded in 2006, and is the holding company for The PURE Group of Insurance Companies and related entities (PURE Group). PUI and its subsidiaries provide capital support and management services to Privilege Underwriters Reciprocal Exchange (PURE). PURE is a policyholder-owned reciprocal insurer dedicated to creating an exceptional experience for responsible high net worth individuals and families. The insurer provides customizable coverage for high-value homes, automobiles, jewelry, art, personal liability, watercraft, flood, fraud and cyber fraud to nearly 90,000 responsible, high-net worth families throughout the United States. In return for a fee, PURE Risk Management, LLC, a wholly-owned subsidiary of PUI, acts as Attorney-in-Fact for PURE. The PURE Group's low cost of capital, careful member selection and proactive risk management all contribute to highly competitive rates and a Financial Strength Rating of "A (Excellent)" from A.M. Best Company, Inc.
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P.S.Message #5389 from richardred at 7/20/2019 9:59:08 PM
Tokio Marine, which spent $17 billion on acquisitions, says there's more to come Bloomberg
Tokio Marine Holdings Inc. is seeking acquisition opportunities in Asian emerging markets and elsewhere as it seeks to double profits from those regions, according to the new chief of Japan’s largest property-and-casualty insurer.
“We have group companies in Southeast Asia but they’re small,” Satoru Komiya, who became president Monday, said in an interview. “If we have a chance to make a further leap in the Philippines, Indonesia and Malaysia, we’d like to expand our business.”
Komiya’s quest to deepen the company’s global reach comes after it spent more than $17 billion (¥1.82 trillion) in the past 11 years on a string of large acquisitions overseas, Bloomberg data show. Tokio Marine and its Japanese competitors are looking abroad to diversify geographic risk and make up for diminishing prospects at home as the population shrinks.
The company is also looking for opportunities in emerging markets beyond Asia, such as Central and South America and the Middle East, said Komiya, 58, who was promoted from senior managing director in charge of overseas businesses. While it isn’t working on any specific deals now, the insurer has compiled a list of potential targets, he added.
“Valuations are high because of excess money globally,” he said. “But if there’s a good chance, we’d like to pursue it actively.”
Overseas insurance businesses now account for almost half of Tokio Marine’s profits, but these mainly U.S.-focused deals — including the purchase of Houston-based HCC Insurance Holdings Inc. for $7.5 billion in 2015 — have left Asia and other emerging markets as a minor contributor. The company has said it wants to increase the proportion of these regions’ profits to 20 percent of its overseas businesses, up from about 10 percent now.
There are early signs of Tokio Marine’s pivot to Asia deals. Last year, the company agreed to buy the Thai and Indonesian businesses of Sydney-based Insurance Australia Group Ltd. for about 525 million Australian dollars (¥56.2 billion).
Komiya said he’s paying more immediate attention to building the firm’s nonlife insurance business in Asia outside Japan. “Life insurance business takes time” to generate substantial profits, he said.
He is leaving open the possibility of large-scale acquisitions in the U.S. and Europe, where the company bought specialty insurers providing coverage for particular industries and liabilities, as opposed to general auto and home insurance. Tokio Marine HCC and other overseas units will continue to do smaller “bolt-on” acquisitions, the CEO added.
One specific challenge that Komiya is inheriting in his new role as president is a sexual harassment complaint at its U.K. unit. Two executives at Tokio Marine Kiln Group Ltd., a managing agent at Lloyd’s of London, have resigned following reports of the allegations.
Komiya said the unit has set up a third-party committee to investigate the matter and the holding company is being briefed. “We are monitoring the situation to make sure TMK will take appropriate measures,” he said in an emailed response to questions because the story broke after the interview.
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