HDI Global Specialty formed to focus on high growth and margin business

Talanx has decided to merge the primary specialty operations of its Hannover Re and HDI Global operations to create HDI Global Specialty, an international specialty insurer that will kick off with more than €1bn in premium income. HDI Global, along with the other leading industrial insurers, is struggling to deliver strong and profitable growth in core traditional European lines and markets. Specialty business offers a more attractive level of margin and higher growth rates. This move therefore makes strategic sense as the company aims to stand firm in core markets such as German commercial and corporate property and liability lines. HDI Global Specialty will write agency and specialty insurance business in lines such as errors and omissions liability insurance, directors and officers liability insurance, legal expenses insurance, sports and entertainment, aviation, offshore energy and animal insurance. To create the joint venture, HDI Global will acquire the majority of shares in International Insurance Company of Hannover (Inter Hannover), a subsidiary company of Hannover Re. The purchase price will be about €100m. After the transaction has taken place, Inter Hannover will be renamed HDI Global Specialty SE. HDI Global will contribute its specialty portfolio to the new company. HDI Global will hold 50.2% of the new company and Hannover Re will hold the other 49.8% of the shares in the new operation. Talanx said HDI Global Specialty will be launched with a premium volume of more than €1bn and will “strive to achieve substantial organic growth”. “This step strengthens our roots as an industrial insurer. The joint venture enables us to bring together the cross-business segment expertise we have in the area of specialty in one place within the group and concentrate our knowhow. This allows us to focus on particularly profitable and high-growth market segments. The move creates a company that has an outstanding position in the specialty market and enjoys excellent growth perspectives,” commented Torsten Leue, chairman of Talanx’s board of management. “We have a number of reasons for bringing together the agency and specialty primary insurance business of Inter Hannover in the joint venture. This strengthens the focus on our core business in accordance with our strategy of ‘Creating value through reinsurance’. At the same time, reinsuring the portfolio enables us to derive even more benefit from the growth opportunities available in specialty business. We can then make use of the capital that becomes available as a result to grow the business further,” said Ulrich Wallin, chairman of Hannover Re’s executive board. Dr Christian Hinsch, HDI Global’s board chairman and CEO, said “the bundled knowhow” of the new joint venture will help expansion in the specialty market. “We are creating a very strong company in line with our strategy of profitable growth. It has a highly competent team with a focused profile and the company will be operating worldwide,” he continued. “The specialty business has attractive above-average margins and is growing faster every year than classic industrial business. This highlights the demand and we want to benefit from that. We will provide our customers and broker partners with even more comprehensive service based knowhow,” he added.

HDI Global Specialty formed to focus on high growth and margin business

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