Lloyd’s insurer gets £600m Japanese offer

Michael Bow
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ONE OF Lloyd’s of London’s biggest insurers is on the verge of being snapped up by a Japanese insurance giant, in a deal worth around £600m.

Canopius Group, which is majority owned by UK private equity firm Bregal Capital, is in talks with Sompo Japan Insurance about the deal, which could be agreed as early as this week.

Sompo’s parent company, Nikkei- listed NKSJ Holdings, said no decision had been made on the takeover while Canopius, based in Lime Street, said it would not comment on the bid.

Canopius executive chairman Michael Watson said: “The attractions of Lloyd’s as a platform for the transaction of global specialty insurance and reinsurance have rarely been more highly prized than they are currently.

“Against that background it is to be expected that Canopius would be the subject of potential acquisition interest, recognising the strength of our franchise and reputation.”

The UK-based insurer is the tenth largest at Lloyd’s and has about 400 employees based in London, with another 160 based in the US, Ireland, Zurich, Singapore and Australia.

Sources say the £600m price tag for Canopius represents decent value for the company at about 1.5 times its book value, which stood in the region of £390m for the first half of the 2013.

Last year the group had gross written premiums of £692m while after tax profit for shareholders came in at £49m.

Canopius’s controlling shareholder Bregal, which owns 84 per cent after it took control of the firm in 2003, is leading the talks with Sompo.

The company’s management, which owns around five per cent of the firm, is also thought to be involved. Bregal did not respond to a request for comment yesterday.

The deal will cement a growing trend among Japanese insurers to diversify their businesses away from slowing domestic markets to overseas territories.

NKSJ previously took control of Brazilian insurer Maritima Seguros in June in a £60m deal, giving access to faster growing emerging markets.

The takeover talks come amid a shake-up in the senior ranks of Canopius, with Lloyd’s lining up Canopius chief executive Inga Beale as the first female chief executive in the insurance market’s 325-year history.

Beale, who has run Canopius since 2011, would replace outgoing chief Richard Ward, who is leaving after seven years at the helm.

Beale is understood to be a frontrunner for the job having held a string of executive positions before Canopius, including the role of global chief underwriting officer at Zurich Financial Services and chief executive at Converium.

Canopius declined to comment on the appointment last night.

The possible move would mark a huge leap forward for female representation in the insurance industry, with just 15.5 per cent of boardroom roles currently held by females in the insurance industry, according to the latest Post Insurance Census.

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