In a major move, Allianz Global Corporate & Specialty SE has agreed to sell its U.S. mid-market and entertainment insurance business underwritten through Fireman’s Fund to an Arch Capital Group Ltd. unit for $450 million. The transaction is expected to result in $1.4 billion of total transaction value for Allianz Group, with Arch Insurance North America assuming about $2 billion in loss reserves associated with the business.
The sale of Fireman’s Fund includes most of the active business of the company, and marks a significant expansion for Arch Insurance North America’s presence in the U.S. middle market, which is a targeted growth area for the company. Approximately 500 AGCS staff are expected to join Arch as part of the transaction.
Allianz bought Petaluma, California-based Fireman’s Fund in 1991 for about $3.3 billion and over the past 30 years, operations have been restructured, including absorbing some of its commercial business into AGCS units in 2014 and selling its personal lines business for wealthy individuals in 2015. In 2016, Allianz transferred about $2.2 billion of Fireman’s Fund business to a runoff insurer, leaving only the active business of the company up for sale to Arch Insurance North America today
