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Though there have been mammoth recent deals between AXA and XL Group, and the strategic partnership between Allianz and LV=, generally acquisitions involving two insurance giants are a rare thing – but now you can add another to the list.
“The acquisition of Ellipse reflects our disciplined approach to selectively expanding our existing Life & Retirement businesses while pursuing opportunistic growth,” said Kevin Hogan, executive vice president and CEO of AIG Life & Retirement when announcing the deal. “Ellipse brings a strong team with a scalable business platform to our well-positioned, technology-driven UK life business.”
Ellipse has been touted for its group protection capabilities – it offers products including income protection, critical illness and life. It is the sixth largest UK group life provider based on 2017 new business volumes and reached an 8% share of new business premiums and a 4% share of in-force premiums in 2017. It has a technology-enabled model with high levels of straight through processing that AIG is now hoping will be an asset for its team in terms of efficiently managing group risk schemes.
“Ellipse’s group life business is highly complementary to AIG’s existing UK individual protection offering. It positions us to capitalise on the strong growth potential in the UK group market by allowing us to provide a holistic suite of innovative protection products that better serve our clients and partners,” explained Adam Winslow, CEO, AIG Life. “Additionally, I’m excited to start working side by side with our Ellipse colleagues, who share a similar culture and entrepreneurial spirit, a mono-line protection focus and recognized technology leadership.”
Lee Lovett, CEO of Ellipse, described the move as an “exciting chapter” while Munich Re admitted the sale was the best move for both parties.
“We are glad to have found a trusted partner for this deal in AIG, pairing the right strategic fit on their side with a good opportunity for us to re-focus our UK market approach,” said Thomas Braune, Munich Re’s chief executive of life and health reinsurance in Europe. “This is a great opportunity for both sides and we are looking forward to completing this deal soon.”
Terms of the transaction were not disclosed but it will be fully funded with cash and is expected to close in the first quarter of next year.
