Business Moves

Transatlantic, Allied World

Transatlantic Holdings, Inc. and Allied World Assurance Co. Holdings, AG have agreed to a merger that will create a leading, global specialty insurance and reinsurance company. The combined entity will have total invested assets of $21 billion, total shareholders’ equity of nearly $7 billion, and total capital of $8.5 billion. The combined company will operate with the corporate name TransAllied Group Holdings, AG, offering specialty insurance and reinsurance via two distinct brands – Transatlantic Reinsurance and Allied World Insurance.

The transaction is structured as a merger of equals, with shareholders of Transatlantic receiving 0.88 Allied World common shares for each Transatlantic common share held. Following the merger, Transatlantic shareholders will own approximately 58 percent of the combined company on a fully diluted basis, with Allied World shareholders owning approximately 42 percent. The combined company will have 39 offices located throughout 18 countries worldwide. Closing is estimated for the fourth quarter of 2011.

Scott Carmilani, chairman, president and chief executive officer of Allied World Assurance Co. Holdings AG, will serve as the president and CEO of the new company, with overall responsibility for the global organization. Robert Orlich, president and CEO of Transatlantic, will retire.

BHMS, Hilb Group

A New York private investment firm has taken a controlling interest in Virginia-based insurance broker, The Hilb Group. BHMS Investments has completed a controlling equity investment in Hilb, which was formed in 2009 by former senior executives of Hilb Rogal & Hobbs Co. (HRH) and bought by Willis Group Holdings in 2008 for $2.1 billion. Hilb said its senior management team will continue to hold a significant ownership stake in the business. Robert J. Hilb, CEO of Hilb, said the capital provided by BHMS will help the firm further execute on its plan to build a “leading middle market brokerage agency in the tradition of HRH” through retail agency acquisitions.

Travelers, JMalucelli

The Travelers Companies completed its acquisition of a 43 percent interest in JMalucelli Participações em Seguros e Resseguros S.A., the market leader in the surety insurance business in Brazil with a market share in excess of 30 percent.

Travelers has invested approximately $410 million and has an option to increase its interest to up to 49.9 percent within 18 months.