Source: http://www.propertycasualty360.com, May 1, 2015
By: Shawn Moynihan
Forging a combined new competitor in the global specialty insurance and reinsurance markets, XL Group PLC has completed its acquisition of Catlin Group Ltd., and will soon be marketing the combined venture under a new name that its CEO believes will project its strengths in a competitive landscape.
Beginning next Monday, May 4, the combined company will be marketed as XL Catlin and a global advertising campaign and new public website will be launched to coincide with market introduction of the new XL Catlin moniker and brand on May 5. (The name of the parent company will remain XL Group plc.)
Based in Hamilton, Bermuda, Catlin – which underwrites specialty P&C insurance and reinsurance in more than 30 lines – was approached by XL in December about the potential for an acquisition deal that would value Catlin at 2.53 billion pounds, or about $3.97 billion. The close of this deal bolsters XL’s P&C insurance and reinsurance portfolio, and creates a combined company valued in excess of $12 billion.
XL’s Mike McGavick will continue as CEO, and Stephen Catlin, founder and CEO of Catlin Group Ltd., has joined XL as Executive Deputy Chairman, also serving on the company’s board of directors.
McGavick tells PropertyCasualty360.com that the new “XL Catlin” name emerged from a desire to deliver a message of unity and strength. “I thought it was crucial that we show the marketplace that we are really bringing forward the strengths of both organizations,” he says, “and what better way to do that than to use both names? It’s a clear statement of who we are and how we intend to compete.”
McGavick commented that the deal creates scale for the new combined entity, but more important, “scale with a very specific purpose with regard to specialty markets.”
“After 30 years as CEO of Catlin, I’m excited to be taking this next step with XL,” Stephen Catlin said in a statement. “With greater scale, capacity and an expanded platform of products and services, we look forward to creating increased value for our shareholders, clients, brokers, employees and partners.”
The acquisition allows the former XL’s team to build on its strengths – and now enjoy better positioning – in various specialty markets worldwide. McGavick noted that XL had beencarefully building out in Crisis Management, for example; now, he says, it jumps to being No. 5 writer globally, in that market.
“Now we have the momentum of both firms carrying on into the future,” McGavick adds. “It’s an important time to be able to write a very big line.”
The CEO sayshe believes more major players will be – and some are already – pondering increased acquisitions to bolster their strength.
“I think this is an incredibly interesting time” from that perspective, he says. “We’ve been thinking about M&A for years. Everyone’s checking to see if they’ve really matched themselves to the competitive forces in the sector.” Adding that he’s seeing beginning of a new wave of strategic deals being sought for better positioning, “The good news for us is, we were already putting ours to bed.”