Munich Re buys Lloyd's insurer

FRANKFURT: Munich Re AG, the world's second-largest reinsurer by gross premiums, said Monday it is buying UK-based MSP Underwriting Ltd. for a price the company says is in the "mid double-digit million euro range".

MSP Underwriting Ltd owns both the Lloyd's of London managing agency Beaufort Underwriting Agency Ltd and the Lloyd's service company Evergreen Underwriting Services Ltd, Munich Re said in a statement.

"The acquisition enables Munich Re to broaden its business written via Lloyd's," the company said. Lloyd's business is traditionally on the borderline between primary insurance and reinsurance.

Reinsurance companies sell backup coverage to other insurers, spreading risk so the system can handle losses from major disasters.

"Through MSP Underwriting, we will gain further access to Lloyd's business," Munich Re said. "MSP Underwriting writes highly profitable short-tail property business and complements our existing portfolio perfectly.

Munich Re shares fell 0.5 per cent to euro 133.53 ($192.27) in Frankfurt.