Generali to buy Liberty’s Irish and Iberian units for €2.3bn

Italian insurance giant Generali has agreed to buy Liberty Mutual’s businesses in Ireland, Spain and Portugal in a deal worth €2.3 billion.

It will mark a return by the Italian group to the Irish general insurance market some 22 years after it closed its Dublin office, which had been writing small amounts of property and casualty business as well as commercial insurance at the time.

The deal will give the Italian group an initial 5 per cent share and an eighth position in the market in the Republic.

The Irish Times had reported in February that Zurich Insurance Group was in talks at the time to buy the Liberty businesses, but it could not be determined at the time whether the discussions were exclusive.

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Boston-based Liberty Mutual entered the Irish market in 2011 by taking over the main businesses of Quinn Insurance, which had fallen into administration a year earlier after a large hole was discovered in its balance sheet. Zurich was among the shortlisted bidders that had circled Quinn Insurance at that stage.

Liberty’s Irish operation, which has about 550 employees on the island, was subsumed into Madrid-based Liberty Seguros in 2018, leaving it as a branch of the Spanish company.

Bloomberg reported last November that Liberty was exploring the sale of the unit for more than €1 billion, and that it was working with Bank of America to find a buyer. The Italian giant’s re-entry into Irish general insurance follows a number of reforms aimed at reducing volatility and coverage costs in a historically highly volatile market even by the cyclical nature of insurance internationally.

The average award by the Personal Injuries Assessment Board (PIAB) fell by 38 per cent in the first half of last year across motor, public and employers’ liability lines, compared to the same period in 2020, before new judicial awards guidelines were implemented.

Meanwhile, the Central Bank of Ireland imposed a ban last July on the previously widespread practice of motor and home insurers increasing premiums for loyal customers by stealth.

Laws enacted last year to strengthen the PIAB’s role are being rolled out on a phased basis, and legislation currently going through the Oireachtas aimed at balancing a property owner or business’s responsibilities with those of customers or the general public are also expected ultimately to reduce costs for insurers and customers alike.

Separately, South African insurance company OUTsurance confirmed in March that it plans to enter the Irish market next year, targeting motor and home coverage.

Liberty’s other European operations – Liberty Specialty Markets, Liberty Mutual Reinsurance, Liberty Mutual Surety, Liberty IT and Hughes Insurance – are not included in this transaction and will continue to operate in their respective markets.

Generali is one of the largest global insurance and asset management providers with a presence in over 50 countries and a total premium income of €81.5 billion in 2022.

The group sold an Irish-based unit, called Generali PanEurope, which offered savings and investments products to high-net-worth individuals across the continent, in 2018.