Munich Re said it is acquiring the UK company MSP Underwriting Ltd., owner of both the Beaufort Underwriting Agency Limited, which manages the business of Lloyd's Syndicate 318, and Lloyd's service company Evergreen Underwriting Services.

The purchase price was described as "in the mid-double-digit million Euro range."

The reinsurer said MSP Underwriting writes commercial business.

Via Beaufort Underwriting, Munich Re will gain access to 47.3 percent of the business of Syndicate 318. Munich Re has reinsured Syndicate 318 since 2002.

Munich Re said the acquisition enables it to broaden its business written via Lloyd's in lines not covered by the Watkins Syndicate, an established member of the Munich Re Group that specializes in marine insurance.

Peter R?der, Munich Re board member, said in a statement: "Syndicate 318 has a proven track record of actively managing the cycle and writing business profitably throughout it. We intend to continue on this successful course, for which we are counting on the longstanding experience and know-how of the Syndicate team."

Lloyd's business is traditionally on the borderline between primary insurance and reinsurance, the company said.

"Through MSP Underwriting, we will gain further access to Lloyd's business. MSP Underwriting writes highly profitable short-tail property business and complements our existing portfolio perfectly," Mr. R?der continued.

Michael Pritchard, executive director of MSP Underwriting, noted: "We look forward to our collaboration with Munich Re. The acquisition by one of the world's leading reinsurers creates new strategic advantages for us. Given our excellent relationship to date, Munich Re was a preferred partner for this transaction."

MSP Underwriting focuses on international property business, but also has two smaller portfolios with commercial property and aviation insurance. This makes the business almost exclusively of a short-tail character--with short claims settlement periods.

In the financial year 2006, Syndicate 318 earned gross premiums of $283 million (EUR197 million).

The Lloyd's managing agency had a turnover of $7.2 million (EUR5 million). A Munich Re spokesperson said the term "turnover" is used in contrast to gross premiums written. "The managing agency receives fees/commission and this constitutes their turnover."

The acquisition is expected to be completed by the end of the fourth quarter of this year, once approvals have been obtained from the appropriate regulatory authorities.

Special Reports /

UK Purchase Expands Munich Re's Lloyd's Presence

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