ESIS Inc., the risk management services wing of ACE USA, the U.S.-based retail operating division of ACE Limited (ACE), has acquired the majority shares of ProClaim America, to form a new business unit named ESIS ProClaim. The acquired company is a national professional liability services firm providing claims and risk management services to the healthcare industry.
ESIS ProClaim will comprise ESIS’ Medical, Professional and Product Liability Claims Consulting Unit along with ProClaims and will be headed by Sam Terzich.
This new unit will offer claims and consulting services to healthcare providers, professionals, manufacturers and their insurers. Also, the unit will guide clients to successfully manage their healthcare professional liability exposures along with services including claim handling for professional liability exposures for medical malpractice, senior care liability, and lawyers’ liability, along with employment practices, directors and officers and product liability.
ACE Limited’s Insurance-North American segment recorded a decline in premium written in the second quarter of 2010. We expect the addition of ProClaim America to give an impetus to premiums written, thus helping the segment to perform well in the upcoming quarters.
It seems ACE Limited is on an acquisition trail. In mid-September, the company agreed to acquire Jerneh Insurance Berhad in Malaysia, for a purchase consideration of $200 million, thereby expanding its footprint in Asia. The company also agreed to acquire an 80% share of Rain and Hail Insurance Service Inc. for $1.1 billion in cash.
The acquisitions will be accretive to the company’s return on equity and book value per share and also help the company deliver a return on capital in excess of 15%.
The company reported solid second-quarter earnings primarily driven by better-than-expected, top-line growth and management expects to come in at the top end of the guided range of $6.25–$6.75 per share for full year 2010.
Though the company remains well capitalized it adopts conservative underwriting practices and scores strongly with the rating agencies, muted top-line improvement and competitive pressures restricting pricing keep us on the sidelines.
We maintain our “Neutral” recommendation on ACE Limited. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.
Headquartered in Zurich, Switzerland, ACE Limited, through its subsidiaries, provides a range of insurance and reinsurance products to commercial and individual customers worldwide.
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