Business Moves

Alliant, Jardine Lloyd Thompson

Jardine Lloyd Thompson Group PLC sold its U.S.-based property and casualty insurance and employee benefits businesses to California-based Alliant Insurance Services Inc.

JLT said the proceeds would be used to enhance the group’s financial position including debt reduction. The loss on sale before tax will be approximately $30 million, subject to completion adjustments. The loss includes the write-off of goodwill and transaction costs and will be treated as an exceptional item.

Alliant Insurance Services, based in Newport Beach, Calif., has a network of companies offering property-casualty and risk management services, employee benefits, life insurance, retirement and savings programs. Those include Driver Specialty Group, Alliant Specialty Insurance Services, Alliant Risk Services Group, Franey Muha Commercial Group and Kelter Commercial Group.

JLT will continue to operate U.S.-based aviation and wind power insurance businesses and reinsurance operations. It plans to build on its position as a provider of access to the London and Bermuda insurance markets for U.S. brokers and their clients.

The sale comprises gross assets of $102.4 million. The assets are predominantly goodwill with attributable turnover of $54.2 million and profit before tax of $6.8 million in 2005. The annualized net impact on earnings per share excluding the loss on sale is anticipated to be broadly neutral.

It is expected the sale, subject to conditions and regulatory approval, will be completed before October 2006.

Houlihan Lokey Howard & Zukin, an international investment bank, served as exclusive financial advisor to JLT in the transaction.

BISYS, JCH Insurance Brokers

BISYS Commercial Insurance Services, a provider of commercial property and casualty insurance solutions, acquired JCH Environmental Insurance Brokers, the environmental practice of JCH Insurance Brokers, a New York-based commercial insurance operation.

The acquisition allows BISYS Commercial Insurance Services to expand its ability to address environmental exposures.

JCH has three U.S. locations in Atlanta, Denver and New York. JCH Environmental’s experience includes providing risk management solutions to a range of businesses including contracting, manufacturing and real estate.

BISYS Commercial Insurance Services is an independent wholesale distributor of commercial property and casualty insurance.

American Re, Munich Re America

Munich Reinsurance America Inc. officially changed its name from American Re-Insurance Co. The name of the holding company, American Re Corp., changed to Munich Re America Corp.

Munich Reinsurance America Inc., Munich Re’s largest reinsurance subsidiary, continues to operate as a separate corporate entity in the U.S. market.

Munich-American RiskPartners will use the Munich Reinsurance America name and the division will be known as Specialty Markets.

The names of American Alternative Insurance Corp. (AAIC) and The Princeton Excess and Surplus Lines Insurance Co. (PESLIC) will not change.

The Web address for Munich Reinsurance America is now www.munichreamerica.com.

XL, ITAU

Bermuda’s XL Capital Ltd. and Banco Itaú Holding Financeira S.A. (ITAÚ) entered a definitive agreement to form a joint venture insurance company in Brazil. The announcement follows news that both parties signed a memorandum of understanding, and is subject to regulatory approval.

The new insurance company, ITAÚ XL Seguros Corporativos S.A. (ITAÚ XL), will combine the Brazilian Property, Casualty and Specialty commercial insurance business of ITAÚ and XL, and will operate in Brazil’s commercial insurance market.

ITAÚ is the second largest private bank in Brazil in terms of assets and one of the largest in terms of market capitalization among Latin American Banks. It is the third largest provider of commercial lines insurance in Brazil. As of June 30, 2006, ITAÚ had assets of $79.7 billion and shareholders’ equity of $ 8.1 billion.

Aon Sub, Fredy & Ilan Beck

Aon Aminim, a unit of Aon International, headquartered in Tel Aviv, Israel, acquired the business of Fredy & Ilan Beck Insurance Brokers in Haifa, Israel, subject to approval of the relevant authorities.

The businesses of Aon Aminim, Tel Aviv, and Fredy and Ilan Beck will merge to become Aon Israel Insurance Brokerage. The new organization will be one of the largest retail insurance brokerage companies in the country. Terms of the transaction were not disclosed.

Ilan Beck will become a shareholder of the combined company and CEO of Aon’s insurance brokerage business in Israel. Beck works with the founder of Aon Aminim, Ephraim Kriel, in bringing the two teams together. Kriel also will chair a country board established to represent all of Aon’s interests in Israel.

CRM Holdings, Embarcadero Insurance

CRM Holdings Ltd., a provider of fee-based management services and reinsurance to self-insured workers’ compensation groups, signed a stock purchase agreement to acquire privately held Embarcadero Insurance Holdings Inc. for approximately $45 million in cash.

The deal is expected to close by the end of 2006 and will expand CRM’s workers’ compensation insurance business.

Under the terms of the agreement, CRM USA Holdings will acquire the outstanding shares of Embarcadero and Embarcadero will be become a wholly-owned subsidiary of CRM USA Holdings.

Embarcadero, through its wholly-owned subsidiary Majestic Insurance Co., writes workers’ compensation insurance for medium to large size businesses. Majestic is a California domiciled insurance company licensed in 15 states, and operates in California, Arizona, Alaska, Nevada, Oregon and Washington. Majestic began operations in 1986 and has since grown its workers’ compensation net earned premiums to $71.3 million in 2005. Majestic’s five-year average combined ratio was 98.6 percent through 2005. EIH had total assets at Dec. 31, 2005, of $211 million and 2005 net income of $5.2 million.

The aggregate purchase price to be paid in the acquisition is the consolidated book value of Embarcadero at the time of closing, which is estimated as approximately $45 million, and will be paid in cash. Of the aggregate purchase price, $4 million will be held in escrow for up to 18 months following the closing to cover potential indemnification claims for breaches of certain representations and warranties, and an additional $3.2 million will be held in escrow for five years to cover indemnification claims by CRM USA Holdings with respect to reserves for losses and adjustment expenses. The agreement is subject to customary closing conditions including regulatory approval and is expected to close by the end of 2006.

Topics California USA Alliant Aon Israel