Time New York: Mon 26 Sep 06:31 am  |  Save 15% on H&R Block Online


XL Catlin Braces in Australia, to Add Brooklyn Underwriting


XL Catlin, the global brand name used by XL Group Ltd.’s XL, has entered into a definitive agreement to acquire Brooklyn Underwriting Pty Limited and Brooklyn IT Pty Limited (“Brooklyn”) from their beneficial owner Paul Hines. The buyout will enable XL Catlin to address the growing demands and sophisticated needs of clients and brokers in Australia.

The transaction is expected to be completed at the beginning of the fourth quarter of 2016.

Rationale of the Acquisition

Sydney, Australia-based Brooklyn, a specialist underwriting agency and a Lloyd’s approved coverholder, boasts of operations for more than two decades. The underwriting agency provides specialist insurance products for small and medium-sized enterprises (SMEs), ranging from high risk property to complex liability. These products cover the customized liability products for specific professions.

This acquisition seems a perfect fit for XL Catlin as Brooklyn complements its commitment toward underwriting, claims and service excellence. The actions will also help XL Group to solidify its presence in Australia.

Brooklyn, on the other hand, stands to benefit from the acquirer’s extensive capabilities, global expertise, financial strength and efficient claims service capabilities.

Compelling Inorganic Growth Story

XL Group pursues strategic acquisitions to diversify its portfolio and strengthen its global footprint as well as fuel its growth. In this respect, the most significant is the acquisition of Catlin Group Limited in May 2015. XL Group targets a premier position in global specialty insurance and reinsurance markets and hence, acquired Catlin Group. Following the acquisition, XL Group changed its brand name to XL Catlin. Also, XL America, Inc., its indirect wholly owned subsidiary, acquired Allied International Holdings, Inc., an ace insurer of the outdoor entertainment industry in the U.S., this February.

XL Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Insurers Ramping Up Growth via Acquisitions

Acquisitions are a well-accepted strategy for growth among insurers. Recently, Brown & Brown of Connecticut, Inc., a subsidiary of Brown & Brown, Inc. BRO, acquired the assets of Kronholm Insurance Services, Inc. Also, Arch Capital Group Ltd. ACGL announced its decision to acquire United Guaranty Corporation and AIG United Guaranty Insurance Limited from the parent company, American International Group, Inc. AIG last month.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.