English
Jul
08
Majority of GMAC Insurance Group to be Acquired by Maiden Holdings
Posted on Jul 08, 2010 by Sergio Ulloa (G+)
Aiming to gain a sales foothold in Europe, Maiden Holdings Ltd., the Bermuda-based re-insurer has reached an agreement with British-based GMAC International Insurance Services Ltd. to buy the majority of their infrastructure, assets and liabilities. Currently, GMAC is part of Detroit-based Ally Financial, which was formerly named GMAC Financial Services Inc. As part of the deal, Maiden also gets renewal rights on nearly US$100 million (EUR 79 million) of mostly auto re-insurance, plus unearned premiums and the assumption of more than US$100 million (EUR 79 million) in loss reserves, funded by cash and other investments. The client base of GMAC International Insurance are retail customers buying its auto-related insurance products in the European Union and other markets. Until the regulatory approval of the deal is obtained, GMAC will remain a part of Ally Financial. Not immune to the effects of the financial tsunami, Ally received three bailouts from the US government and has in the past been selling insurance-related assets to repay its rescuer. Last year, Ally posted a loss of more than US$ 10 billion (EUR 7.9 billion). Maiden aims to continue building on the successful business development platform, taking advantage of the unique auto-related distribution networks, which include the sale of extended service contracts and insurance for auto dealer inventories. The underwriting portion of the portfolio is profitable and there is future fee income growth potential through the distribution networks developed by GMAC. The deal is expected to be completed towards the end of the third quarter of this year; the financial details of the deal were not disclosed. Companies mentioned: GMAC
Founded in 1939 as Motors Insurance Corporation, the GMAC Insurance Group is part of GMAC Financial Services. The company provides a broad range of insurance and insurance-related products and services for individual consumers, as well as automotive dealerships and other businesses. Today, GMAC Insurance is one of the largest insurers in the nation. GMAC Insurance has offices in many different countries around the world.
Maiden
Maiden Holdings, Ltd. is a Bermuda-based holding company with insurance subsidiaries that provide specialty reinsurance products for the global property and casualty market. Their differentiated model is focused on delivering high returns and low volatility, taking a value-added approach to meeting the non-catastrophic working capital reinsurance needs of their clients. Maiden has underwriting operations in both Bermuda and the United States.