211 views

Lloyd's insurer swallowed up by Japanese giant in a multi-billion dollar deal

Oliver Gill
Follow Oliver
Britain Holds Two-Minute Silence For Armistice Day
Sompo already has a foothold in Lloyd's via its ownership of Canopius (Source: Getty)

Lloyd's insurer Endurance Specialty has been bought by Japan's third largest insurance company in a deal worth $6.3bn (£5.0bn).

Sompo, which has a market capitalisation of £9.4bn, has agreed to buy Endurance Specialty shares for $93 each, a value that is around 40 per cent higher than the average trading price New York-listed company over the last few months.

The deal is Sompo's second high-profile purchase of as Lloyd's insurer over the last few years. Known in 2013 as NKSJ Holdings Inc, it bought speciality insurer Canopius Group Ltd in a deal worth $1 billion.

Read more: Lloyd's of London could announce Brexit restructure plans before Christmas

Based in Bermuda and originating in the US, Endurance Speciality focuses on marine and non-marine insurance in the Lloyd's market as well as underwriting property and treaty reinsurance.

For Endurance chief executive John Charman the deal represented the achievement of a series of strategic goals.

"When I joined Endurance just over three years ago, I stated quite publicly that cost efficient scale, globally diversified insurance and reinsurance products as well as market relevance were absolutely essential to our future success.

"I also signalled that I would seek out a high quality, strong Asian partner to further complement our global business capabilities for the future. Our alignment today with Sompo achieves all those goals and promises so much more," he said.

Read more: Brexit fears overshadow latest Lloyd's of London results

Japanese insurance companies have been active in buying up US players recently. Meiji Yasuda Life Insurance Co acquired StanCorp Financial Group Inc for $5.0bn and Sumitomo Life Insurance Co purchased Symetra Financial Corp for around $3.8bn.

The deal represented Sompo's first foray into purchasing a US-based business but chief executive, Kengo Sakurada, said that he does not plan sweeping personnel changes.

"We want the current management to stay, so we are paying for a control premium," he said.

The deal will be funded by cash Sompo has on its balance sheet. In August it raised 200bn yen (£1.5bn) through a successful placing of a corporate bond.​

Related articles