After its Validus acquisition, AIG is eyeing another specialty insurer, Glatfelter, to grow its business lines in new areas.
In line with its recent acquisitions, AIG has set its sights on the purchase of Glatfelter Insurance Group, a large brokerage and insurance company based in York, Pennsylvania. Financial terms of the deal were not released, but the merger is targeted for a fourth-quarter close.
Offering an array of specialty insurance programs, Glatfelter currently employs 3,000 brokers that work with some 30,000 insureds in the U.S. and Canada. The firm’s CEO Tony Campisi said in a statement that Glatfelter and AIG have had a 40-year business relationship, which should smooth the integration of both companies. Once the deal is finalized, Campisi and David McElroy, the incoming CEO of AIG General Insurance, will work together.
A Niche Shop
Founded in 1951, Glatfelter oversees several niche insurance platforms. Its public practice division serves public organizations such as water utilities, municipalities, and educational institutions, while its healthcare unit insures hospices, assisted living facilities, senior living facilities, and home healthcare providers. The firm also offers insurance programs for emergency responders and private ambulance companies as well as benefit plans for public entities, schools, and nonprofits.
Within its religious practice group, Glatfelter provides coverage to churches, synagogues, temples, mosques, and other religious organizations. In addition, Glatfelter conducts retail insurance activities through two agencies in York and Joplin, Missouri.
It was Glatfelter’s specialty insurance programs that AIG sought so it can fill out its general insurance operations, AIG’s President and CEO Brian Duperreault said in a statement announcing the deal. “Glatfelter Insurance Group is an outstanding strategic fit with AIG, bringing high-quality specialty programs business capabilities, a demonstrated track record of strong underwriting results, and proprietary program management technology,” he said.
Earlier this year, Duperreault stated that AIG was on the hunt for acquisitions to boost revenue growth and extend the insurer internationally. Specifically, he said he was eyeing companies in large markets with what he termed mature legal systems. He added, however, the price had to right before making a buy.
During the summer, AIG found such a buy, when it sealed a $5.56-billion deal to acquire Validus Holdings. Like the Glatfelter purchase, Validus supplements AIG’s current business lines, including a Bermuda-based reinsurer, Validus Re, and an agriculture insurance provider, Crop Risk Services.
Not only was the Validus acquisition AIG’s largest since it emerged from the financial crisis of 2007 and 2009, but it also signals a trend of established insurers buying specialty insurance companies in order to broaden their offerings.
AIG isn’t the only insurer on the lookout for “special” acquisitions. Early September saw The Hartford agree to purchase global specialty insurer Navigators Group for $2.1 billion. The deal enlarges The Hartford’s international presence, expands several of its current business lines including construction and professional liability, and opens up new capabilities in other areas, such as maritime, energy, and environmental insurance.If the AIG megadeals are any indication, 2018 may surpass last year’s total for insurance M&As in the U.S. as insurers strive to gain entry into new business lines. Insurance agents must keep up on the latest acquisition news so they know if the carriers they work with change hands.