QBE Buying British Marine

Australia’s QBE Insurance Group today announced that it has signed an agreement to acquire the U.K.-based specialist marine insurer, British Marine Holdings Limited. The deal is expected to close before December 31, 2005, subject to regulatory approvals.

The bulletin notes: “British Marine was founded in 1876 and provides Protection and Indemnity liability (P&I) and Hull and Machinery (H&M) insurance to ship owners. It insures over 8,000 small ships in more than 80 countries, through a network of over 250 brokers. Annualised gross written premium is expected to be A$175 million [U.S. $132 million]. Return on equity for the 2004/2005 financial year was 31.2 percent with a combined operating ratio of 77.9 percent. Net tangible assets are expected to be A$160 million [U.S. $121 million] at the date of completion and the purchase price is close to 1.7 times net tangible assets.”

Based on those figures QBE is paying around A$272 million (U.S. $205.6 million) for British Marine. The acquisition would be the Group’s largest so far in 2005.

QBE CEO Frank O’Halloran commented: “British Marine is an extremely well run company in the specialised small ship insurance market, which has annualised worldwide gross written premium of around A$2.5 billion [U.S. $1.9 billion]. QBE’s financial strength and network will enable British Marine to grow its business and improve capital efficiency. British Marine will also provide QBE with further distribution for its products.”