Insurance Zurich acquires travel insurance business from AIG
The Zurich Group is expanding its travel insurance business. It is taking over the travel insurance and assistance business for private customers from competitor AIG under the name AIG Travel. Zurich will integrate the business into its subsidiary Cover-More.
26.06.2024, 09:03
SDA
The takeover will cost Zurich a total of USD 600 million, as the insurer announced in a press release on Wednesday. Depending on business performance, an additional earn-out payment will be due as a performance-related additional price. The transaction is expected to be completed before the end of 2024, subject to regulatory approvals.
Following completion of the acquisition, the enlarged Cover-More Group is expected to generate annual gross premiums of around 2 billion dollars, according to the statement. In contrast, the Zurich Group's Swiss Solvency Test ratio will fall by around 4 percentage points. At the end of March, however, the SST capital ratio was estimated at 232 percent, well above the target of at least 160 percent.
Expansion of the US business
"The travel insurance business is a high priority for us. This transaction is an excellent strategic fit", Cara Morton, Head of Zurich Global Ventures, is quoted as saying in the press release. This will enable Zurich to expand its base with private customers in this business and improve its offering. Morton was head of the Cover More Group until the end of January.
With the acquisition of the Travel Guard brand from AIG Travel, Zurich is supplementing Cover-More's global multi-brand model, expanding its presence in the US market and gaining access to important distribution partners, the statement continued. AIG Travel's global IT platform will also enhance Cover-More's capabilities.
With AIG Travel, Cover-More will be able to offer its travel assistance apps to a larger number of partners and customers. AIG Travel's global service centers will also be taken over and integrated into Cover-More's business model.
Cover-More, which was acquired in 2017 and is based in Sydney, was previously active in 15 countries and operated 24/7 emergency travel medical assistance centers in Australia, Argentina, Canada and the UK. Its customers include more than 17 million people.
