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Home, Trygg-Hansa plot future course.

AmBase Corp. sold its subsidiary, The Home Insurance Co., for approximately $1 billion last February to Home Holdings Inc., a consortium of investors. The majority (60 percent) is held by the Trygg-Hansa SPP Group, Sweden's largest insurer; 20 percent by Industrial Mutual Insurance Co., Finland's second largest insurer; and 10 percent by Bermuda-based International Insurance Investors, a subsidiary of Centre Reinsurance Service (Bermuda) Ltd. Individual investors hold the remaining 10 percent.

Trygg-Hansa has total assets of $40 billion; Industrial Mutual has total assets of $883 million and reported a premium income of $235 million in 1989; The Home has total assets of $7 billion. The combined premium income between The Home and Trygg-Hansa is approximately $6.4. billion, with Trygg-Hansa contributing to about $4 billion of that total.

The change in ownership will not alter the company's strategy of underwriting larger insureds with more complex needs, says James Meenaghan, chairman, president and chief executive officer of The Home.

"Before 1986 The Home did not have a clear strategic direction," he says. "The company was underwriting small commercial business sold through independent agents with no continuity and no strategy."

Yet, Mr. Meenaghan continued, "now there is a definite move to underwrite larger insureds. As the world moves toward a global economy, The Home has been seeking an international presence. With Trygg-Hansa, we have substantially increased our international presence."

But while The Home may be an international company, it is still not truly global, and, therefore, its future lies in strategic alliances with other European companies, according to Lars-Goran Nilsson, executive vice chairman of Home Holdings Inc. and executive vice president of Trygg-Hansa.

Trygg-Hansa has a strong presence in Sweden and Finland and is involved in reinsurance and marine markets in Stockholm, London and New york, but the company is said to be hunting for strategic alliances in the European Community.

Nevertheless, Trygg-Hansa and Industrial Mutual have made significant changes of late. They recently entered into an agreement with the Soviet insurance company, Ingosstrakh, and established an insurance company in the Netherlands.

"The Home matches our strategy," says Mr. Nilsson. "The United States is a key market for Swedish investment and the acquisition of The Home is an integral part of our overall internationalization."

Mr. Nilsson also commented that deregulation in the European Community was a key factor behind Trygg-Hansa's decision to acquire The Home. Sweden, he said, has competed head-on with large European insurers, and its market remains very mature, with sophisticated buyers and overbearing competition among insurers.

"We will continue to increase our positioning in the European market," he said. "The Home gives us a lever for such a move."
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Title Annotation:International Scene; Home Insurance Co., Trygg-Hansa SPP Group of Sweden
Author:Oshins, Alice H.
Publication:Risk Management
Date:May 1, 1991
Words:440
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