Best: Acquisition creates synergies

Bermuda reinsurer Validus’ Holdings $690m acquisition of New Jersey-based Western World could see some efficiencies gained from the move.

This from ratings agency AM Best, which said the ratings of the pooled insurance members of Western World Insurance Group (Western World) are unchanged.”

The transaction is anticipated to close in the late third quarter or early fourth quarter of 2014, subject to regulatory approvals and other customary closing conditions.

Best added: “From a strategic standpoint, Western World will allow Validus to enhance and expand its business profile by providing a U.S. specialty commercial insurance distribution platform. Post transaction close, Western World’s current management team will remain intact, and Western World will operate as a separate entity under Validus.

It’s analysis “ takes into consideration the terms of the agreement, the ‘bolt-on’ nature of the acquisition, the potential for synergies and efficiencies to be gained in the future and the benefits of being acquired by a larger, well regarded Bermuda-based global re/insurance organization. 

Best also takes into consideration Western World’s “strong leadership position in the US excess and surplus lines sector and its strategic role within the Validus group once the transaction is finalized”.

Western World’s management team will remain and will operate as a separate entity under Validus. 

The move will allow Validus to enhance and expand its business profile by providing a US specialty commercial insurance distribution platform. 

Best said: “From a strategic standpoint, Western World provides Validus with immediate access to approximately $300 million of US specialty commercial lines premiums, additional flexibility via admitted and non-admitted platforms, direct access to more than 270 agents and brokers throughout the United States and a franchise that is well regarded among its excess and surplus lines peers. 

‘Validus deal will make us more competitive’

Western World’s CEO is praising the $690 million deal that saw Bermuda-based Validus Holdings Ltd acquire it. 

The two firms announced the deal earlier this week. 

Western World will keep its management team, name, and operate as a separate business under the Validus umbrella of companies. 

Expertise

Tom Mulligan, Western World’s CEO, said: “Validus brings capital and expertise in short-tail classes of business, which will ad vance the competitive advantages in all of our underwriting divisions.’’

Ed Noonan, Validus chairman, said in a release: “Bringing together Validus, a leader in the short-tail insurance and reinsurance market, and Western World, with its excellent U.S. distribution platform, outstanding management and industry-leading technology, creates a franchise that will provide compelling products and services for our customers.”

Western World currently has 200 employees and was founded in 1964.