Australia-based QBE Acquires Puerto Rico P/C Insurer Optima Insurance Group

Australian insurer and reinsurer QBE Insurance Group Ltd. said it has agreed to acquire Puerto Rico-based Optima Insurance Group.

Optima, which focuses on small and midsize property/casualty commercial risks and personal lines, posted an estimated $100 million in gross written premium in 2011, QBE said in a statement.

The transaction includes Optima Insurance Co., which offers property/casualty coverage; Colonial Insurance Agency, a managing general agent; and New Century Financial Corp., which provides premium financing for Optima and Colonial clients.

The deal is subject to regulatory approval by the insurance commissioner in Puerto Rico and is expected to be completed in March 2012.

The acquisition is in line with QBE's goals of growing its business through product and geographical diversification and new distribution channels, QBE Latin America Chief Executive Officer Jose Sojo said in a statement.

Acquisitions have contributed to QBE's earnings this year. During the first half of 2011, the company posted 30% growth in gross written premiums to US$8.9 billion, which was driven in part by acquisitions during the previous 12 months (Best's News Service, Aug. 23, 2011).

Acquiring Optima also complements QBE's business and strengthens its position in the region, the company said.

Optima concentrates on motor, casualty and property risks in Puerto Rico, according to BestLink. Most of the property exposures relate to standard fire and perils policies with coverage for natural catastrophes such as windstorm and earthquake.

"With this acquisition, we reinforce our strategy to keep growing in Latin America through acquisition of companies that produce solid underwriting profits," Sojo said.

Based in Sydney, Australia, QBE is one of the top 20 insurers and reinsurers in the world. It does business in 52 countries and has a presence in every key insurance market, the company said.

Its Americas division in New York offers property/casualty insurance through subsidiaries in 10 countries and had $5.2 billion in gross written premium in 2010.

The group's operations are divided into three principal regions: Australia/Asia Pacific, Europe and the Americas. The Americas represents about 35% of its consolidated gross written premium. As of December 2010, its Latin American division was primarily comprised of general insurance operations in Colombia, Argentina, Mexico, Brazil and Ecuador, according to BestLink.

Optima Insurance Co. has a current Best's Financial Strength Rating of B++ (Good).

Members of QBE Insurance Group Ltd. currently have a Best's Financial Strength Rating of A (Excellent).

(By Marie Suszynski)