Allied World Assurance Company Holdings, AG
announced that it has completed its previously announced
acquisitions of Hong Kong and Singapore operations of Royal &
Sun Alliance Insurance plc. ("RSA")
Allied World had announced its intention to takeover the Hong Kong
and Singapore operations in Aug, 2014. The closings follow receipt
of all necessary regulatory and court approvals. Both operations
underwrite a mix of commercial specialty and retail business.
The acquisitions will bring in a niche group of specialty lines,
including casualty, construction and engineering, marine and
property business and are likely to be immediately accretive to
Allied World's earnings.
The transaction, which is valued at $193 million, was funded by
Allied World with cash in hand.
Post-acquisition the businesses are now a part of Allied World's
Global Markets Insurance segment. This newly formed segment is
already operational in Europe and Asia Pacific, which includes
offices in Australia, Hong Kong and Singapore.
Allied World chose Royal & Sun Alliance Insurance because of
its long operating history in both the regions. While Royal &
Sun Alliance Insurance has been present in Hong Kong for the past
40 years, its relation with Singapore is 180 years old. Last year,
these units accounted for nearly $12.25 billion of gross premiums
Notably, Allied World's solid liquidity with cash and cash
equivalents of $589.3 million as of Dec 2014 (up 11% from 2013) and
retained earnings of $3.8 billion (up 10.4%) cushion its expansion
Currently, Allied World sports a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Other stocks from the property and casualty insurance sector that
warrant a look include Arch Capital Group Ltd.
, First American Financial Corporation
and Fidelity National Financial, Inc.
. All of these stocks sport the same Zacks Rank as Allied
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ALLIED WORLD AS (AWH): Free Stock Analysis
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