Business Moves

Max Specialty, Guaranty Casualty

Max Specialty Insurance Co., of Richmond, Virginia, the U.S. excess and surplus lines unit of Max Capital Group Ltd., reports it has acquired Commercial Guaranty Casualty Insurance Co., an insurance entity licensed to write business in all 50 states plus the District of Columbia.

Max Specialty expects that, after filing of the required corporate amendments and after regulatory review, Commercial Guaranty’s name will be changed to Max America Insurance Co. Financial terms of the transaction were not disclosed.

With the acquisition of Commercial Guaranty, Max Specialty said its underwriting team can now write both admitted and non-admitted business. The acquired operation will primarily support the Max Specialty team’s previously announced entry into inland and ocean marine underwriting.

Max Specialty Insurance Co., the non-admitted company, is licensed in Delaware and currently approved in 46 other states. Both Max Specialty and Max America will accept submissions only from properly licensed and appointed agents and brokers.

Liberty Mutual, Safeco

The period during which federal officials might raise antitrust concerns over Liberty Mutual Group’s proposed acquisition of Safeco Corp. has expired.

The expiration of the waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976 satisfies a condition to the closing of the acquisition. As announced in April, Liberty Mutual has proposed buying all outstanding shares of common stock of Safeco for $68.25 per share in cash. The transaction is expected to close by the end of the third quarter of 2008.

RBS

Last month’s deadline for informal offers for Royal Bank of Scotland’s insurance arm was delayed on the request of several suitors, sources close to the process said. First-round bids for RBS Insurance, Britain’s largest motor insurer, had initially been expected by late last month. Some potential bidders have also asked the bank for more information on the unit.

“The vendor will always do what it can to ensure offerors have as much time as possible to pull together sensible proposals,” one of the sources said.

At least four bidders were expected to put in offers for the unit, valued at around $13.8 billion, with Zurich Financial Services seen as the front-runner.

Eight players had initially been expected to compete for the much-coveted insurance business, which includes brands Direct Line and Churchill as well as European operations, but Warren Buffett’s Berkshire Hathaway and Italy’s Generali have both said they are no longer in the running. U.S. giant AIG and China’s Ping An are also understood to have left the race, leaving Allianz, whose interest is also said to be lukewarm, U.S. insurers Travelers and Allstate and Zurich.

Zurich, which already has a growing UK presence, has the necessary financial firepower while much of the rest of the sector is under pressure and hired RBS Insurance’s former boss in 2006. Buying the RBS unit would propel it to the top of the pile in Europe’s most competitive general insurance market.

Both RBS and Zurich have declined to comment.

RBS put its insurance arm on the block last month as part of efforts to shore up its balance sheet, battered by the credit crunch and the bank’s part in the ambitious takeover of ABN AMRO last year, which also include a $23.67 billion cash call. It hopes to have news on the sale process and a possible shortlist by the time it publishes interim results in August. Copyright, Reuters

MetLife, Reinsurance Group

MetLife Inc, the largest U.S. life insurer, said that it would divest its 52 percent stake in Reinsurance Group of America Inc. Under the multi-step transaction, MetLife said Reinsurance Group would recapitalize its common stock into two classes and then execute a tax-free split-off. Its stockholders could exchange their MetLife shares for Reinsurance Group Class B common stock. MetLife said the transaction would strengthen each company’s ability to expand its core business. RGA said it believed it would significantly increase the liquidity and public holding of its common stock by nearly doubling the number of shares held by public investors, and would give management greater flexibility in managing the business.

Topics USA