Allied World US Launches M&A Division

Allied World Assurance Co. Holdings said it's adding a new mergers and acquisition division to its U.S. operations.

The new division will offer products including: representations and warranties insurance, loss portfolio transfers, loss mitigation insurance/litigation buy-outs, tax opinion liability, and specific contingency insurance.

Jeff Anderson, vice president, has been appointed to oversee the new division, which will be based in Allied World'sNew York office.

Prior to his current role, Anderson was vice president of Allied World's professional lines, where he was responsible for the underwriting, marketing, production and distribution for public company directors & officers insurance, fiduciary liability insurance and employment practices liability insurance. Before joining Allied World, he was senior vice president at Willis overseeing a suite of management liability insurance products.

Despite current economic conditions, M&A activity has been on the rise in the United States over the past several years and the demand for adequate coverage is growing, John McElroy, president of professional lines for Allied World, said in a statement.

"Errors that occur during corporate financial transactions can be extremely costly to all parties involved," he said.

Allied World has an M&A unit in the United Kingdom and the new U.S.-based unit will provide coverage to U.S. firms.

In the company's fourth quarter earnings call, Scott Carmilani, Allied World's president and chief executive officer, said the industry is poised on the cusp of a rise in rates. Also, the company posted a jump in fourth-quarter net income to $183.1 million from $92.8 million, (Best's News Service, Feb. 17, 2012).

Allied World had its own difficulties with M&A activity. Last year, after the company announced plans to merge with Transatlantic Holdings Inc. in a deal valued then at $3.12 billion, four other companies eventually came forward with counter offers. Eventually, the merger plan with Transatlantic fell apart, and Transatlantic announced plans to merge with Alleghany Corp. in a $3.43 billion deal slated to close this quarter (Best's News Service, Sept. 9, 2011).

Allied World has a current Best's Financial Strength Rating of A (Excellent).

On the afternoon of Feb. 21, shares of Allied World (NYSE: AWH) were trading at $67.92, down 0.01% from the previous close.

(By Meg Green, senior associate editor, BestWeek: [email protected])