BOSTON–(BUSINESS WIRE)–Liberty Mutual Insurance announced today it has signed a definitive agreement to acquire Ironshore Inc., a premier global specialty lines company, from Fosun International Limited.
“The combination of Ironshore and Liberty Mutual is a win-win proposition and value creating for both companies”
The transaction is expected to close in the first half of 2017 pending regulatory approvals and customary closing conditions. Upon closing, Liberty Mutual will acquire a 100 percent ownership interest in Ironshore. The purchase price will equate to 1.45x Ironshore’s actual tangible book value as of year-end 2016, and is estimated to be approximately $3 billion. The purchase price is subject to closing price adjustments.
Once the transaction is closed, Ironshore will continue to operate with the same management team and brand, but as part of the larger Liberty Mutual organization, which has a focus on growing its specialty lines operations.
“We are pleased to have Ironshore and its proven management team led by CEO Kevin H. Kelley join Liberty Mutual,” said David H. Long, Liberty Mutual Insurance Chairman and CEO. “Ironshore has a track record of profitably underwriting global and diverse specialty risks insurance and is an ideal complement to Liberty Mutual, providing additional scale, expertise, innovation and market relationships to our $5 billion Global Specialty business.”
Ironshore, which was founded in 2006, had gross premiums written of $2.2 billion in 2015 and is one of the ten largest Excess & Surplus lines insurers in the U.S. The company, which has approximately 800 employees located in 15 countries worldwide, is organized into three operating hubs based in the United States, Bermuda and London.
“The combination of Ironshore and Liberty Mutual is a win-win proposition and value creating for both companies,” said Kevin H. Kelley, Ironshore CEO. “Ironshore will become part of another ‘A’ rated company with a global reach, a strong balance sheet, wide client base and a much greater capacity to drive profitable growth.”
Barclays Capital Inc. acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP provided legal advice to Liberty Mutual Insurance in the transaction.
About Liberty Mutual Insurance
Liberty Mutual Insurance helps people preserve and protect what they earn, build, own and cherish. Keeping this promise means we are there when our policyholders throughout the world need us most.
Liberty Mutual is a diversified insurer with operations in 29 countries and economies around the world. We rank 73rd on the Fortune 100 list of largest corporations in the U.S. based on 2015 revenue. As of December 31, 2015, Liberty Mutual had $121.7 billion in consolidated assets, $102.5 billion in consolidated liabilities, and $37.6 billion in annual consolidated revenue.
Liberty employs more than 50,000 people in over 800 offices throughout the world. We offer a wide range of insurance products and services, including personal automobile, homeowners, accident & health, commercial automobile, general liability, property, surety, workers compensation, group disability, group life, specialty lines, reinsurance, individual life and annuity products.
You can learn more about us by visiting www.libertymutualinsurance.com.
By Alex Glenn
THE ASSOCIATED PRESS
You might think you have airtight insurance protection against storms, car accidents and other mishaps. But you’d hate to discover hidden cracks in your coverage once it’s too late.
Here are five insurance problems you might not be as prepared for as you think and how to plug the coverage gap.
1. NO FLOOD INSURANCE
Flooding has occurred in every state in the country over the past five years, according to the Federal Emergency Management Agency. Yet only 12 per cent of homeowners nationwide carry flood coverage, an Insurance Information Institute poll found.
Homeowners insurance doesn’t cover flooding; you’ll need a separate policy. You can find local agents through the National Flood Insurance Program . You can also ask your home insurer for help starting a policy through the federal program, or whether there are companies in your state that offer private flood insurance.
There’s a 30-day waiting period before coverage kicks in, so get flood insurance squared away well ahead of coming storms.
2. NO WAY TO PAY OFF A LEASE OR LOAN ON A Totalled CAR
Gap insurance helps you avoid owing money on a car loan or lease even if your vehicle has been totalled or stolen. Along with comprehensive and collision coverage, gap insurance is a smart addition if you lease or finance a car.
Say you lease a $20,000 car at payments of $400 a month. Five months later, your car is totalled in an accident. If the car’s value has dropped to $15,000, that’s the amount your collision claim check will be, minus your deductible. That won’t be enough to cover the $18,000 left on your lease.
This is where gap insurance kicks in. It makes up the difference between what your car is worth when it’s stolen or totalled and how much you owe on a car loan or lease.
You can buy gap insurance from the car dealership or your lender. Or you can go through your car insurance company _ which is typically cheaper unless you want gap coverage for several years.
3. NO PLAN FOR SEWAGE BACKUPS
You may not realize that you’re responsible for the sewer line that runs from the main pipeline in the street to your house. Yet standard home insurance typically doesn’t cover backups in this part of the line. Enter sewer backup coverage. It pays for cleanup and repairs from spewed sewage in your house.
Sewer backup coverage is relatively affordable $40 to $50 a year, according to the Insurance Information Institute . Talk to your home insurer about adding this kind of coverage.
4. NO INCOME AFTER A DISABILITY
Among 20-year-olds, more than 1 in 4 will suffer a disability before retirement age, according to the Social Security Administration. If you aren’t able to work because of an illness or accident, you need a plan to pay the bills.
Social Security disability insurance is available only to people with long-term disabilities lasting at least one year. Some employers offer short-term disability insurance, but it isn’t as common as you might think. Just 38 per cent of workers have access to short-term disability insurance through their employers, according to the Bureau of Labor Statistics.
You don’t have to rely on your workplace for coverage. Individual disability insurance is available from several insurers, such as State Farm, MetLife and Mutual of Omaha. If your employer doesn’t offer short-term disability insurance, or your current benefits fall far short of replacing your full salary, look into getting a policy elsewhere.
5. NO FINANCIAL SAFETY NET FOR EARTHQUAKES
Most homeowners, even those who live in high-risk areas, go without earthquake insurance. They risk financial ruin if their homes and belongings are destroyed. Only 10 per cent of California residents have earthquake insurance, and 14 per cent of people in western states, according to the Insurance Information Institute.
Standard homeowners insurance won’t pay to fix damage caused by earthquakes. Home insurers might offer earthquake coverage as a policy add-on for an extra cost and in California they’re required to. Or you might need to look for stand-alone earthquake insurance.
Californians can shop for a policy through the California Earthquake Authority. For those living in other states, ask your home insurer or agent for help finding companies that sell earthquake coverage, or check your state’s department of insurance website.
Great-West Lifeco Inc. (TSX:GWO) says Putnam Investments, its U.S. investment management operation, is cutting approximately 115 jobs in a bid to trim costs by US$65 million.
The company says the reductions amount to about eight per cent of Putnam’s staff and will be primarily in its operations and technology areas.
A small number of investment management professionals will also be leaving the company.
Great-West, a member of the Power Financial group of companies, offers life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses.
It operates under the Great-West Life, London Life, Canada Life, Irish Life, Great-West Financial and Putnam Investments banners.
AXA announced today that it had completed the sale of its wrap platform business ‘Elevate’ to Standard Life plc, and of its (non-platform) investment, pensions and direct protection (‘Sunlife’) businesses to Phoenix Group Holdings. This follows the announcement made on October 21st for the closing of the UK offshore investment bonds business (‘AXA Isle of Man’) disposal. AXA UK Property & Casualty, Health and Asset Management (‘Architas’) operations are not part of these transactions.
AXA recorded an exceptional negative P&L impact of ca. Euro 0.4 billion, accounted for in net income* during the first half of 2016.
*AXA also realized an exceptional gain of ca. USD 1.1 billion (or ca. Euro 1.0 billion) after tax on the disposal of two real estate properties in the US, accounted for in Net Income during the first half of 2016.
By Jeff Horwitz And Terry Spencer
THE ASSOCIATED PRESS
PALM BEACH, Fla. _ Donald Trump said he received a $17 million insurance payment in 2005 for hurricane damage to Mar-a-Lago, his private club in Palm Beach, but The Associated Press found little evidence of such large-scale damage.
Two years after a series of storms, the real estate tycoon said he didn’t know how much had been spent on repairs but acknowledged he pocketed some of the money. Trump transferred funds into his personal accounts, saying that under the terms of his policy, “you didn’t have to reinvest it.”
In a deposition in an unrelated civil lawsuit, Trump said he got the cash from a “very good insurance policy” and cited ongoing work to the historic home.
“Landscaping, roofing, walls, painting, leaks, artwork in the you know, the great tapestries, tiles, Spanish tiles, the beach, the erosion,” he said of the storm damage. “It’s still not what it was.”
Trump’s description of extensive damage does not match those of Mar-a-Lago members and even Trump loyalists. In an interview about the estate’s history, Trump’s longtime former butler, Anthony Senecal, recalled no catastrophic damage. He said Hurricane Wilma, the last of a string of storms that barrelled through in 2004 and 2005, flattened trees behind Mar-a-Lago, but the house itself only lost some roof tiles.
“That house has never been seriously damaged,” said Senecal, discussing Mar-a-Lago’s luck with hurricanes. “I was there for all of them.”
Just over two weeks after Wilma, Trump hosted 370 guests at Mar-a-Lago for the wedding of his son Donald Jr.
While part of that celebration did have to be moved away from the front lawn due to hurricane damage, wedding photographs by Getty Images showed the house, pools, cabanas and landscaping in good repair.
Valuations for Mar-a-Lago are subjective, but Forbes estimated the 110,000-square-foot property’s value at $150 million in its most recent appraisal of Trump’s net worth. The estate’s historic nature would add to any repair costs, but Tim Frank, Palm Beach’s planning administrator at the time of the hurricanes, said $17 million in work would have required “dozens, maybe scores of workers.” In 2004, Trump built a 20,000-square-foot ballroom from scratch for less than $6 million, according to building permits.
Palm Beach building department records show no permits for construction on that scale after the storms. Permits reflected smaller projects, including installation of new grease traps in the kitchen and tree trimming along the road. The only permits that appeared hurricane-related were for $3,000 in repairs to storm-damaged outdoor lighting and the vacuuming of sand from the property’s beachfront pool. Likewise, records of the city’s Landmarks and Preservation Commission reflected no repair work conducted following the 2004 and 2005 hurricane seasons.
The $17 million Mar-a-Lago insurance payment surfaced during a 2007 deposition in Trump’s unsuccessful libel lawsuit against journalist Tim O’Brien, whom Trump accused of underestimating his wealth. As part of the case, O’Brien’s attorneys were permitted to review Trump’s financial records, including some from the Mar-a-Lago Club. They asked Trump to quantify the damage and explain why he had pocketed money instead of spending it on repairs.
Trump said repairs were ongoing, but acknowledged he could not remember which hurricane had damaged Mar-a-Lago or when it hit.
“We continue to spend the money because we continue to suffer the ravages of that hurricane,” Trump said. “We’re continuously spending money. It really beat up Mar-a-Lago very badly.”
The insurance adjustor who assessed the insurance claim, Hank Stein of VeriClaim Inc., said there had been damage to Trump’s golf course in West Palm Beach and damage to Mar-a-Lago’s roof and landscaping, but he could not remember details. Trump declined to provide the AP with records about the insurance claim or answer specific questions about damage at Mar-a-Lago.
Stein, who has since left VeriClaim for another firm, said he remembered water damage from rain after windows to an observation deck atop the mansion blew open. “I wish I could give you some more information on the breakdown,” he said.
Under local rules, major repairs would have required Trump to request a permit and pay permit fees. If such work were performed without permits, that could have avoided as much as $450,000 in fees but would have likely been illegal.
The city’s former planning administrator said getting away with such extensive, unpermitted work would have been unlikely. Frank cited both his own agency’s vigilance and wealthy Palm Beach residents’ habit of calling out each other’s code violations. Once, Trump’s neighbours hired lawyers to report suspicions that he improperly let guests sleep in poolside cabanas during a wedding.
“If there were $17 million dollars of damage, we sure as hell would have known about that,” said Frank. “I would have known if there was anything in the magnitude of $100,000.”
The Republican mayor of Palm Beach at the time and Mar-a-Lago member Jack McDonald, agreed: “I am unable to comprehend $17 million in reimbursable damage.”
Jane Day, the city’s former historical preservation consultant, who helped oversee Mar-a-Lago’s conversion to a private club and who has visited in the years since as a guest, also was mystified. “This is the first I’m hearing of it.”
Frank said the commission would have granted immediate approval to simple repairs, but Trump or his contractors would still have needed to file for permits.
“If they changed the door knobs I was supposed to review it,” Frank said.
Much of Trump’s property insurance business has long been handled by Pamela Newman, a leading insurance broker for Aon Risk Services Inc. Neither Newman nor AON would discuss the case with AP.
Two former Aon employees familiar with the company’s work for Trump said Trump’s company was routinely late on insurance premium payments and regularly threatened to take its business elsewhere. They spoke on condition of anonymity to discuss confidential business matters and because they feared retribution since they continue to work in the insurance industry. Representing Trump allowed Newman to bring up her work on behalf of Trump in sales pitches to wealthy clients, sometimes offering him as a reference, the employees said.
Newman’s ties to Trump have endured. He and she both sit on the board of New York’s Police Athletic League. She has attended galas at Mar-a-Lago and donated the legal maximum of $2,700 to his presidential exploratory committee before he announced his run. She followed up last July with $25,000 in donations to the Make America Great Again PAC, according to Federal Election Commission records.
According to the Trump deposition, Newman led the effort to obtain a payout on the Mar-a-Lago insurance policy. Trump did not identify which insurer actually footed the bill and the AP was unable to identify who paid the claim.
Documenting an insurance claim as large as the one that Trump made on Mar-a-Lago typically involves extensive verification of the damage. Stein said the process went smoothly and that he worked closely with both Newman and a senior Trump executive, Matt Calamari.
“It would have been myself along with an adjustment team,” he said. “It was a thorough investigation.”
In the depositions, Trump said he knew little about that process that produced his $17 million payday, but praised the policy and said Newman took care of it.
“We had a very good insurance policy, actually,” he said.