AmeriTrust under auction as Fosun seeks exit
Chinese conglomerate Fosun is looking to divest US commercial lines insurer AmeriTrust as it scales back its overseas assets, Inside P&C can reveal.
Sources said Fosun was working with Deutsche Bank as it sought a buyer for the business, which is understood to have book value of around $700mn.
It is understood that first-round bids for the Southfield, Michigan-headquartered firm were due during the course of last month, although sources suggest it attracted limited interest.
Fosun acquired AmeriTrust – then known as Meadowbrook – during a wave of international investment from Chinese firms in the insurance market, which went rapidly into reverse from 2016 under regulatory pressure from both China and the US.
AmeriTrust does not have a track record as a high-return business, and sources said its trailing three-year average combined ratio was in excess of 100%.
The business is led by Vincent Li, who is also listed on Linkedin as chairman and CEO of Fosun Insurance Group.
One banking source suggested Peak Re-backer Fosun had previously sought to sell the business, which writes around $600mn of premiums, without choosing to conclude a deal.
If a deal were to be concluded, this would be among the largest commercial lines P&C deals of the year, with activity being muted except for Chubb's abortive move on The Hartford.
In the mid-2010s, Fosun was perhaps the most active name in M&A in insurance globally.
The business helped found Hong Kong-based reinsurer Peak Re in 2012. It subsequently struck a $433mn deal to buy Meadowbrook after the firm ran into problems following a ratings downgrade to B++.
Fosun bought specialty lines insurer Ironshore in two stages for $2.3bn before ratings agency pressure forced it to reverse course and sell out to current owner Liberty Mutual.
The highly leveraged conglomerate also looked at a range of other opportunities in the sector, coming close to acquiring Montpelier Re when Endurance bought it, holding talks to buy Sirius and agreeing a deal with Israeli insurer Phoenix that ultimately collapsed amidst regulatory issues.
Notoriously, Fosun had multiple M&A teams operating in the market concurrently, with suggestions that it may at times have had different teams looking at the same assets.
AmeriTrust is an A-minus rated commercial lines insurer that has five insurance companies: Star Insurance, Century Surety, ProCentury Insurance, Williamsburg National Insurance and Ameritrust (sic) Insurance.
It has admitted and non-admitted licenses in all 50 states, and works with independent retail agents, wholesalers and program administrators to distribute its products. It also owns an insurance administration services business that provides claims and loss control services to municipalities and self-insured groups.
Fosun and AmeriTrust did not respond to requests for comment.