Markel International Enters German Commercial Market Through Anglo Underwriting Deal

Specialist insurer Markel International said it signed a joint venture agreement with Anglo Underwriting GmbH that could lead to Markel's acquisition of the Munich-based commercial insurer.

Markel said it has taken an initial 50% stake in Anglo Underwriting, with an option to acquire the remaining 50% by 2017. Anglo Underwriting will then become a fully owned Markel business, and its Munich office will add to Markel's growing European network.

Sean Martin, marketing director for Markel International, told Best's News Service that Anglo Underwriting has seven employees and generates about 5 million euros (US$6.5 million) in premiums a year.

The deal gives Markel its first office in Germany. Markel said it intends to grow the business and open further offices serving the German market. The move follows the recent opening of an office in Rotterdam, from which Markel aims to expand across the Netherlands.

Anglo Underwriting was founded in 2005 by Garlich Wulff. His son, Frederik, has been the managing director since 2007. The insurer works with about 2,500 brokers across Germany and Austria, and have about 8,000 individual clients.

"This wide distribution is one of Anglo Underwriting's key strengths, and it is an asset that will be maximized with Markel's backing and technical resources," said Markel.

Anglo Underwriting has six lines: industrial, commercial, private, errors and omissions, professional indemnity and specialties. With Markel's support, Anglo Underwriting's primary focus will be to increase opportunities in the specialty area including professional indemnity, contingency, personal accident and directors and officers, and the private lines business.

"With premiums of more than 180 billion euros a year, Germany is one of the largest and most attractive markets in Europe," said William Stovin, president and chief operating officer of Markel International, in a statement. "Anglo Underwriting is a successful local player with a culture and niche products that fit our brand. The agreement is a first step in building a much stronger presence in Germany and is part of our overall plan for European expansion."

Last year, Markel International acquired a Swedish Lloyd's coverholder that writes property/casualty and accident and health insurance for small and medium-size businesses and local municipalities. Markel acquired Stockholm-based Globen Forsakringar AB/FKH for an undisclosed amount. Established in 1989, Globen Forsakringar distributes insurance through a network of brokers across Sweden (Best's News Service, May 18, 2011).

Markel International Insurance Co. Ltd. currently has a Best's Financial Strength Rating of A (Excellent).

(By David Pilla, international editor, BestWeek: David.Pilla@ambest.com)