Allied World Assurance Co. agreed to buy Hong Kong and Singapore operations from RSA Insurance Group Plc for $215 million to expand in Asia.
Allied World will pay with cash on hand and expects to contribute another $90 million to fully fund the new units, according to a statement yesterday from the Zug, Switzerland-based company.
Insurers including Warren Buffett’s Berkshire Hathaway Inc. are looking to faster-growing Asian economies to boost sales of so-called specialty coverage. Allied World, led by Chief Executive Officer Scott Carmilani, said the deal would help it expand in lines including casualty, construction and marine.
“This is a truly unique opportunity to acquire leading specialty businesses,” Carmilani said in the statement. “This transaction will significantly deepen and broaden our presence in Asia.”
RSA has been divesting units as CEO Stephen Hester works to regain investor confidence after an accounting scandal. The London-based insurer bought reinsurance from Berkshire and struck deals to sell units in China, Canada and Eastern Europe.
Barclays Plc was Allied World’s financial adviser and Baker & McKenzie provided legal guidance. Allied World was formed in Bermuda in 2001 by investors including American International Group Inc., Chubb Corp. and Goldman Sachs Group Inc.