Business Moves
Marsh & McLennan, Kroll, Altegrity
Marsh & McLennan Cos. Inc. agreed to sell investigations unit Kroll to a firm led by former Marsh CEO Michael Cherkasky for less than the insurance broker paid for Kroll six years ago. MMC said it plans to sell Kroll — a corporate sleuth and intelligence expert that has expanded into risk management and other areas — to Altegrity in a $1.13 billion all-cash deal. MMC bought Kroll in 2004 for $1.9 billion. Altegrity is backed by private equity firm Providence Equity Partners.
Swett & Crawford, Cooper Gay
London-based independent wholesale, reinsurance and specialist broker Cooper Gay and Atlanta-based U.S. wholesale broker Swett & Crawford confirmed in joint bulletins that they are in advanced deal discussions.
Preferred Concepts, Mercator
Preferred Concepts, LLC, a national program administrator, has acquired of Mercator Risk Services, a wholesale broker. Mercator is now a wholly owned subsidiary of Preferred Concepts and will continue to trade under the Mercator brand.
Preferred Concepts is a privately held organization that operates out of New York City, Irvine, California and Westport and Hamden, Connecticut. Its affiliated companies include Integrated Risk Facilities, Inc. Protector PG and ezumbrella.com.
The combined company, with 85 employees in Atlanta, Hartford, New York, San Francisco and Westport, Conn., will remain headquartered in New York.
Mercator President and CEO Christopher Treanor will continue as president and CEO of Mercator and as senior executive vice president of Preferred Concepts.
Olympus Insurance, Florida OIR
Home and condominium insurer Olympus Insurance Co., which in April came under scrutiny by Florida insurance regulators, has convinced the regulators that its financial contracts, accounting methods, reinsurance program and claims-paying ability are satisfactory. The state Office of Insurance Regulation has dropped all regulatory action against the Orlando-based company.
The settlement with OIR holds Olympus to limits on the commission it pays its managing general agent (MGA) and other expenses but does not require the insurer to seek additional capital, as OIR had wanted. It also upholds several accounting steps taken by Olympus that OIR had questioned.
Commissioner Kevin McCarty along with Olympus Insurance Co., its managing general agency, Olympus MGA Corp., and their parent, Gemini Financial Holdings, signed the settlement May 27.
In April, OIR threatened the insurer with the loss of its license if the company did not change various “unfair and unreasonable” contracts. Olympus disputed each of the allegations, claiming OIR’s charges were based on “erroneous and unsupported assumptions on the part of OIR.”
Among several issues, OIR questioned whether the payments Olympus had made to its MGA and its overall expense ratio were too high. Olympus maintains its expense ratio was high because its revenues did not meet expectations and not because of MGA payments The settlement calls for Olympus to abide by a 25 percent commission and 28 percent overall expenses cap.
OIR also alleged that the insurer’s catastrophic reinsurance program for 2010 was inadequate and would render the company insolvent following a single storm. But Olympus said its surplus of more than $21 million was adequate to withstand a single big storm. The settlement outlines the reinsurance program Olympus has in procured.
OIR had maintained that while Olympus projected a profit for 2010, its own analysis pointed to a $7 million loss. Olympus said OIR failed to account for expense reimbursements under the revised MGA contract.
Olympus also said its premiums were “well within” allowable statutory limits and its statutory surplus is well above the required minimum of $4 million so there is no need for it to acquire additional capital from Gemini. The settlement acknowledges that Olympus will not seek additional funds from Gemini.