On Friday, we brought you the news that Toronto-based Ontario Municipal Employees Retirement System (OMERS)
is set to pump US$1 billion into Allied World, part of a deal with Fairfax Holdings which is taking over Allied following a merger.
Insurance Business spoke to Sharon Ludlow, head of insurance investments at OMERS, to find out more about the move.
“We really like the fundamentals of
Allied World, we like the results that they have delivered over the years,” Ludlow explained, continuing: “We very much like the business, we like how it sits and complements Fairfax’s existing worldwide operations.”
OMERS has an “existing investing relationship” with Fairfax, Ludlow pointed out, seen most recently in a 2015 deal in which OMERS took a 30% stake in London-based insurer, Brit, from Fairfax.
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Ludlow described the latest deal as one with “meaningful participation” for OMERS, which will indirectly acquire 21% of Allied’s outstanding shares.
Looking ahead, OMERS is keen to pursue more investment opportunities and will look “globally” in both the life and P&C markets.
“We would look to invest along with strategic partners – so those that have depth in the insurance industry,” she explained.
Asked whether the mega-deal would have any trickle-down effect on brokers, Ludlow said that she is “not convinced” that there would be a direct impact or relationship.
“The transaction in and of itself simply means that Allied World is stronger, Fairfax is stronger – collectively, stronger businesses – to the extent that that helps them in their relationships with their brokers.”
“I would like to think that that’s a positive result for everyone.”
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