Important step in the development of the Group’s business segment International Health / Dr. Wolfgang Strassl, member of the Board of Munich Re for Life and HealthCare: “Sterling is a target we have chosen carefully, and it perfectly contributes to the strategy we implemented in early 2006. It also further strengthens our capabilities as a global provider of integrated healthcare management.”
Munich Re has concluded an agreement with Aon Corporation to acquire 100% of Sterling Life Insurance Company, Bellingham, Washington, via subsidiary Munich-American Holding Corporation. The purchase price of US$ 352m (€243m) will be paid out through Munich Re’s own funds. The transaction is expected to be completed in the first quarter of 2008, subject to required regulatory approvals and customary closing conditions. With this acquisition, Munich Re remains fully committed to its existing capital management programme.
Sterling Life Insurance Company (“Sterling”), with an estimated total revenue of US$ 805m in 2007 and 155,000 members, is a leading provider of healthcare benefits to the senior (65+) and mature (50+) US citizens, with a strong presence in the growing Medicare Advantage market. Its product portfolio also includes Medicare supplement and complementary products for seniors. The senior market is the fastest-growing segment of the US healthcare industry.
“Sterling gives us an important platform with an excellent reputation to gain access to the fast-growing senior markets in the US, and to leverage our existing business”, said Peter Choueiri, member of the International Health Board of Munich Re. “Sterling fits perfectly and is another step in the disciplined execution of our US strategy.” Bob Trainer, President of Munich Re America HealthCare, added: “Sterling has an experienced team with a proven track record in the Medicare market. The company has a very attractive book of business, which further diversifies our existing health portfolio.”
“This combination will allow Sterling members to benefit from the wide range of capabilities within Munich Re and creates more opportunities to develop the Sterling brand”, said Debbie Ahl, Sterling Life Insurance Company President and CEO. “The acquisition of Sterling by Munich Re will allow us to expand our business.”
*Medicare Advantage plans are private health plans which compete for the seniors’ business by providing better coverage at affordable prices. They were established with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
Sterling Life Insurance Company, based in Bellingham, WA, has an A. M. Best A- (Excellent) rating and is dedicated to providing a variety of affordable healthcare solutions to Medicare beneficiaries. They currently have 41 offices across the United States and are licensed in 49 states and the District of Columbia. For more information about Sterling Life Insurance Company, please visit www.sterlingplans.com.
The Munich Re Group operates worldwide, turning risk into value. In the financial year 2006, it achieved a profit of €3,519m, the highest since the company was founded in 1880, on premium income of approximately €37bn. The Group operates in all lines of business, with around 37,000 employees at over 50 locations throughout the world and is characterised by particularly pronounced diversification, client focus and earnings stability. With premium income of around €22bn from reinsurance alone, it is one of the world’s leading reinsurers. Its primary insurance operations are mainly concentrated in the ERGO Insurance Group. With premium income of almost €17bn, ERGO is one of the largest insurance groups in Europe and Germany. It is the market leader in Europe in health and legal expenses insurance, and 33 million clients in 25 countries place their trust in the services and security it provides. The global investments of the Munich Re Group amounting to €177bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group. For more information about the Munich Re Group, please visit www.munichre.com.
Munich Re America HealthCare, one of the leading providers of healthcare risk management solutions in the U.S., is a division of Munich Reinsurance America, Inc., a member of the Munich Re Group. For more information about Munich Re America HealthCare, please visit www.mrahc.com.
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.
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In case of enquiries, please contact Dr. Christian Lawrence on +49 (89) 38 91-54 00 or Regine Kaiser on +49 (89) 38 91-27 70.
Munich, 17 December 2007
signed Dr. Strassl signed Dr. Lawrence