Gallatin Point investing $1.25B in TRUE; AIG reportedly lead insurer for JAL jet

TOP NEWS IN GLOBAL INSURANCE

– Gallatin Point Capital LLC will acquire a majority stake in the attorney-in-fact for Trusted Resource Underwriters Exchange (TRUE), investing over $1.25 billion. The target is a reciprocal insurer established by American Family Insurance Group in 2020 to serve homeowners in storm-prone regions of Florida and other parts of the US. Gallatin Point said the investment provides underwriting capacity in Florida at a "crucial time" and allows TRUE to strategically expand its footprint nationally. TRUE will utilize a partnership distribution model through new and existing partnerships.

– Destroyed Japan Airlines Co. Ltd. flight 516 could result in a $130 million insured loss for the aviation segment, Insurance Insider reported, with the publication and Reuters naming American International Group Inc. as the lead insurer of the all-risks policy. AIG did not immediately provide comment to the publications, which cited unnamed sources. The Wall Street Journal reported how the 367 passengers fled from the flaming jet.

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Private auto carriers are also anticipating an easing of inflationary pressures in the coming year that will help underwriting profits.

➤ Berkshire's short-term investments near $100 billion

Berkshire Hathaway had the largest short-term investments assets among US property and casualty and life insurers as of Sept. 30, 2023.

READ MORE about the liquidity crunch and the fallout for the financial sector in our new Issue in Focus.

PROPERTY AND CASUALTY

– White Mountains Insurance Group Ltd. closed the deal to acquire approximately 72.8% of the issued and outstanding equity interests of Utah's Bamboo Ide8 Insurance Services LLC for $296.7 million in cash.

– New York-based The Travelers Cos. Inc. completed the acquisition of cyber insurance managing general underwriter Corvus Insurance Holdings Inc. Travelers funded the acquisition through internal resources.

– Suncorp Group Ltd. has received approximately 19,000 claims related to ongoing weather events that have affected Queensland, New South Wales, Victoria and the Australian Capital Territory since the end of November 2023, including ex-tropical cyclone Jasper. Queensland has been hardest hit with 12,500 total claims and 9,500 home claims, and more are expected. Suncorp expects to be within its natural hazard allowance of A$680 million for the half year to December 2023. The natural hazard allowance for fiscal year 2024 is A$1.36 billion. The group's reinsurance program has a maximum event retention of A$350 million and a 30% Queensland home quota share.

– Almost 38,000 insurance claims have been lodged following the severe weather that has affected Queensland, New South Wales and Victoria since Dec. 23, 2023, said the Insurance Council of Australia, which extended its insurance catastrophe declaration for the recent storms, rain and flooding to Jan. 3.

LIFE AND HEALTH

– Molina Healthcare Inc.'s acquisition of Bright Healthcare's California Medicare business closed Jan. 1. At closing, the business served more than 109,000 members. Bright Health Group Inc. also made the final repayment on its amended credit facility with J.P. Morgan, eliminating its secured debt. The remaining proceeds of the sale are expected to provide a "solid foundation" for the company to advance its continuing business, NeueHealth, in 2024 and beyond.

– Canada's Great-West Lifeco Inc. completed the sale of Putnam Investments to Franklin Resources Inc., operating as Franklin Templeton. The transaction is not expected to have a material financial impact for Great-West Lifeco at close. Further details will be provided as part of the company's year-end disclosures in February.

– KKR & Co. Inc. closed the transaction that gives it full control of Bermuda-based The Global Atlantic Financial Group LLC. KKR acquired a majority of Global Atlantic in 2021 and since that time has served as Global Atlantic's asset manager. Global Atlantic will continue to be led by its management team and operate under the Global Atlantic brand.

REINSURANCE

– US property catastrophe reinsurance rates rose by as much as 50%, while excess of loss pricing adjustments in Asia reverted to levels reminiscent of the period preceding the market hardening in 2023, Gallagher Re said in its report on the Jan. 1, 2024, reinsurance renewals.

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