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New parent paves way for Ironshore acquisitions

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Ironshore’s new owner, Chinese conglomerate Fosun International, has deep pockets and is keen on expanding its substantial global insurance holdings, which is music to the ears of Ironshore Australia MD Katherine Simmonds.

She says the acquisition will enable Ironshore Australia to pursue organic growth and expansion through acquisition.

“I will very much be involved in [identifying acquisition opportunities in Australia], because of the acquisitive nature of our new shareholder,” she told insuranceNEWS.com.au. “Fosun has made 15 acquisitions globally already this year, including a couple of insurance investments.

“Fosun is committed to the global insurance and reinsurance sector. In Australia, Ironshore will be looking to expand organically in terms of people and products, and through acquisitions.”

Fosun will acquire the 80% of US-based Ironshore it does not already own for $US1.8 billion ($1.6 billion).

It acquired 20% in August last year, with that deal approved by regulators in February.

Ironshore will retain its brand entity as a wholly owned subsidiary of Fosun.

Fosun Chairman Guo Guangchang has placed insurance at the heart of the conglomerate’s global expansion drive, aiming to make it “an insurance-oriented investment group”.

Insurance businesses account for 30% of its total assets, including Ironshore, the Prudential joint venture Pramerica Fosun Life Insurance, Portuguese Insurance Group, US-based Meadowbrook Insurance Group, Yong’an P&C Insurance in China and Hong Kong-based Peak Reinsurance.

The Shanghai-based conglomerate owns 300 companies in core sectors such as insurance, property development, healthcare and steel, plus diverse investments in tourism, media, banking and retailing. 

Ironshore was set up in 2006 and provides broker-sourced commercial property and casualty coverage in the US, Australia, Canada, Hong Kong and Singapore.

Ms Simmonds says Fosun’s huge portfolio of businesses gives Ironshore opportunities to cross-sell to member companies.

“What’s really exciting about this transaction is that it will allow greater penetration by Ironshore across the Asia-Pacific, including in Australia. We will be developing distribution lines across Fosun’s 300-strong portfolio base.”

Some of those companies are in Australia, including oil and gas explorer Roc Oil and property investments.

Ms Simmonds says the acquisition takes Ironshore from being a private equity-backed company to a group that can aggressively pursue expansion opportunities, because of its stable capital base.

“This is a very exciting time for Ironshore.”

Ironshore Australia has only seven full-time staff, but this is expected to increase as Ms Simmonds pursues an expansion strategy with her new owner’s support.

The Australian business wrote more than $50 million in premium last year and is on track to achieve gross written premium of $60 million this year.

As well as heading Ironshore in Australia, Ms Simmonds has product responsibility for mergers and acquisitions insurance products in the Asia-Pacific region.