Acquisitions · Property and casualty insurance
Tokio Marine to buy US high-net-worth insurer PURE Group for $3.1 billion
- Buyer
- Tokio Marine Holdings (via HCC) (Tokyo)
- Target
- Privilege Underwriters Inc. (PURE Group), White Plains, New York
- Value
- $3.1B
- Status
- Agreed on October 3, 2019; completed in February 2020.
- Date
- 2019-10-03
Tokio Marine Holdings agreed to buy Privilege Underwriters Inc., known as PURE Group, for $3.1 billion through its US subsidiary HCC Insurance Holdings. PURE, based in White Plains, New York, insures wealthy households, mainly their homes and cars. The sellers were Stone Point Capital, KKR and AXA XL, along with PURE management.
Why it matters
The deal added a fast-growing niche in US personal insurance to Tokio Marine's specialty business. Tokio Marine said the two businesses overlap little, and it planned to sell other specialty products to PURE's wealthy customers.
How PURE earns money
PURE's main income comes from fees for managing Privilege Underwriters Reciprocal Exchange, which writes the policies and is owned by its policyholders. The exchange itself was not part of the sale. In 2018, PURE reported $229 million in fee income, $73 million in pre-tax profit and $963 million in premiums under management, of which homeowners insurance made up 57%.
Price and plans
Stone Point held 51% of PURE, KKR 34%, AXA XL 10% and management and others 5%. Tokio Marine president Satoru Komiya said the price was 33 times PURE's expected 2020 profit, reflecting its growth potential. Tokio Marine planned to reinsure PURE to raise its capacity, and founder Ross Buchmueller was expected to stay. The deal closed in February 2020.
Sources
Kakehashi M&A News home
