US-based Core Specialty Insurance has acquired the MGU/medical stop-loss business of Brookfield Re-owned American National Group (ANAT).
The unit has been acquired through the purchase of 100% of the stock of Standard Life and Accident Insurance Company (SLAICO), as well as certain reinsurance transactions.
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The MGU/stop-loss business of ANAT generated a gross premium income exceeding $300m in 2022.
Managing General Underwriters distributes the business, as well as cedes or retrocedes the majority of the premium and risk related to the programmes underwritten.
Stop-loss coverage is used by employers to limit their exposure under self-insured medical plans.
Core Specialty Insurance will operate the acquired business as a dedicated medical stop-loss division.
The newly formed division will maintain its presence in League City, Texas.
Core Specialty said it expects the deal to be accretive to its earnings per share and return on equity in 2024.
Slated to conclude in the fourth quarter of 2023, the deal is subject to receipt of required regulatory approvals.
This represents Core Specialty’s 13th acquisition of a speciality business unit.
Core Specialty founder, president and CEO Jeff Consolino said: “We are delighted that Medical Stop-Loss will become our 13th speciality business unit. This is a sizable and growing market, with over $26bn in total premium income which has grown at over a 12% annual rate since 2014 according to AM Best market data.
“Medical Stop-Loss is an attractive class of business to us due to its speciality nature, the fact that it does not correlate with our other speciality classes of business, the ability to generate appropriate underwriting profits and the resultant attractive return on capital.
“Together with our Fronted Programs Division, Core Specialty would have over $750m of gross premium income and over $40m in fee income from these two business units based on full-year 2022 results. We look forward to working with Jim Stelling and his team, their specialized Managing General Underwriters and their existing reinsurance panel.”
Furthermore, the company has named Jim Stelling as the president of its newly created medical stop-loss division.
Most recently, Stelling was the executive vice president of health insurance and speciality markets group operations at American National Insurance Company.
