Euclid Transactional secures Zurich capacity after AGCS relationship ends

Euclid Transactional has added capacity from Zurich North America to its mergers and acquisitions (M&A) insurance program after the MGA’s relationship with Allianz Global Corporate & Specialty (AGCS) ended earlier this year.

Zurich North America joins Swiss Re Corporate Solutions, Scor and Aspen in providing capacity to Euclid Transactional. The MGA specialises in representations and warranties insurance underwriting and claims handling services and other deal-related lines of business.

“The Euclid team is a proven leader in the transactional insurance space,” said Brian Benjamin, head of financial lines for US commercial insurance at Zurich North America.

“I am excited to deepen our commitment to the transactional insurance market by joining the Euclid panel. Zurich looks forward to leveraging our strong balance sheet in support of Jay and his seasoned team as they facilitate M&A deals for so many clients that will be putting their trust in us,” added Benjamin.

The addition of Zurich North America to Euclid Transactional’s panel of capacity providers comes after AGCS’ partnership with the MGA came to an end.

AGCS’ North American operation launched its own transactional liability unit in 2016, and part of that formation included partnering with Euclid Transactional. However, this publication has learned that relationship came to an end earlier this year.

Euclid Transactional was itself launched in 2016, with capacity initially from AGCS and Swiss Re Corporate Solutions. The MGA is led by managing principal Jay Rittberg. Since opening for business, Euclid Transactional has underwritten more than $45bn of transactional risk limits, and insured deals with a combined value in excess of $1.6trn over some 2,100 deals.

The MGA now has more than 50 staff spread across five offices in New York, Chicago, London, Toronto, and most recently Frankfurt which opened in July earlier this year.

“We are excited that Zurich, a global leader with a sophisticated understanding of transactional insurance, has joined our panel of large, creditworthy carriers,” said Rittberg.

“Their support for our approach shows the value of our enduring focus on strong execution and best-in-class solutions across all types of transactions,” he added.

Euclid Transactional is one of several MGAs that operate under the Euclid Insurance Services parent. Other MGAs within the Euclid Program Managers family include Euclid Life Science, Euclid Public Sector and environmental liability-focused Euclid Enviant.

John Colis, president and CEO of Euclid Insurance Services and chairman of Euclid Transactional, said: “This expansion of our collaboration with AM Best rated A or better carriers adds Zurich’s exceptional balance sheet to support M&A transactions.”

Back in July, Aon’s Risk in Review 1H2020 report highlighted that while other parts of the insurance market have been hardening, a survey undertaken by the broker found that the M&A sector had been “relatively insulated” from such increases.

At the time, 89 percent of respondents to its survey said they were not under pressure to increase pricing in light of the hardening that has been taking place in the broader insurance industry. There was an acceptance that Covid-19 might have an impact on potential pricing going forward however.

In a blog post published at the beginning of last month, Rittberg revealed that October was Euclid Transactional’s busiest ever month with the MGA binding 87 policies, up 30 percent on the same month last year.

“October saw the aggregate cost of our US primary policies rise by over 25 percent compared to October 2019,” Rittberg said.

“We attribute this increase in rate to clients and brokers recognising that Euclid and other established markets have paid hundreds of millions of dollars of claims over the last 12 months, and valuing insurers that have a proven track record for deal execution and fairly and efficiently paying claims.”