Mitsui Sumitomo Insurance (MSI), a subsidiary of MS&AD Insurance Group Holdings, is to acquire New Jersey-based Transverse Insurance Group.
The mandate comes as MSI looks to grow its global insurance and financial services by expanding its presence in the US.
Managing general agents (MGAs) in the US, who have been granted underwriting authority
from insurers to sell, bind and manage insurance contracts on their behalf, are enhancing their presence as a distribution channel, says MSI.
The size of the US MGA market in 2021 was approximately JPY9 trillion, which is one of the strategic areas where MSI will invest, it adds.
Transverse is a non-life insurer that delegates certain functions and authorities to MGAs and transfers risks underwritten by MGAs to reinsurers (commonly referred to as fronting insurers).
Through its licenses in all 50 states in the US, and network with various MGAs, Transverse will serve as a platform for MSI to incorporate the growth of the US MGA market.
Noriyuki Hara, president and CEO of MS&AD Insurance Group Holdings, says: “This business model has been well received by the market and sustainable growth could be achieved. MSI views the acquisition to be a good opportunity to capture the growth of the US MGA market.
“In addition, as a result of the acquisition, MSI sees a number of potential synergies between MSI and Transverse, including enhancing credit rating of Transverse and gaining new business opportunities, backed by the MSI’s strong balance sheet.”
