Cincinnati Financial has reached an agreement to acquire German reinsurer Munich Re’s Lloyd’s subsidiary MSP Underwriting in an all-cash deal valued at about £102m.

MSP, which is based in London, operates as a specialty underwriter through Beaufort Underwriting Agency, which underwrites for Lloyd’s Syndicate 318.

In 2017, the Syndicate wrote almost £153m annual gross written premiums.

Commenting on the Cincinnati Financial acquisition, Munich Re Board of Management member Peter Röder said: “After the sale, Munich Re will have a focused and less complex set-up in order to drive profitable growth within the Lloyd’s market, instead of running two platforms in parallel.

“We remain committed to the Lloyd’s market, and will continue to grow the business within Munich Re Syndicate.”

Cincinnati Financial acquisition

Once the transaction is closed, MSP will become a wholly owned subsidiary of Cincinnati. The acquired entity, however, will continue to operate under its own brand and with its existing leadership team.

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Cincinnati Financial president and CEO Steven Johnston said: “Adding MSP Underwriting to the Cincinnati family brings experienced underwriters who we believe will open opportunities for us to support our agents in new geographies and lines of business.

“And, it complements our existing large commercial account, excess and surplus lines, high net worth personal lines and reinsurance assumed growth initiatives.

“Munich Re is a long-time and valuable reinsurance partner. We are pleased to work with them through this transaction. MSP’s size allows us to follow our proven strategy of building successful insurance businesses over time – just as we have with our excess and surplus lines subsidiary and our reinsurance assumed business.”

The transaction, which has been approved by Cincinnati’s board of directors, is scheduled to be concluded in the first quarter of next year.