MSI begins acquisition process

Mitsui Sumitomo Insurance Co., Ltd. (MSI), a subsidiary of MS&AD Insurance Group Holdings, Inc. has commenced procedures to acquire Transverse Insurance Group, LLC (Transverse).

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 strong network with various MGAs, Transverse will serve as a platform for MSI to incorporate the growth of the U.S. MGA market.

Furthermore, Transverse sets itself apart from pure fronting insurers through its ability to retain risk, which allows it to share the risk and return with MGAs and reinsurers, stated a press note. 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 gain new business opportunities backed the MSI’s strong balance sheet.