Tokio Marine has purchased IAG’s Accident and Health International Underwriting (AHI) agency, as it looks to expand in the region through niche specialty business lines.

It is the second underwriting agency deal between the companies this year, following the purchase of the Sydney-based Bond and Credit Company in April.

AHI employs more than 53 staff across offices in Sydney, Melbourne, Brisbane and Perth, and underwrites more than $63 million in gross written premium (GWP). About 60% of its distribution is through local brokers, with the remainder through international intermediaries.

The business is spread across a portfolio mix that includes individual and group personal accident, corporate and leisure travel, expatriate and inbound health insurance, kidnap and ransom, and voluntary workers and sporting schemes.

Tokio Marine Management (Australasia) CEO Shigekazu Ueno says the deal combines AHI’s accident, medical and corporate travel specialties with Tokio Marine’s financial strength and global reach.

“This acquisition presents attractive opportunities for the group to grow and expand these lines of business across the Oceania region and beyond,” he said.

AHI opened its first office in Sydney in 1998. IAG acquired 50% of the business in 2010 and the remaining 50% in 2015.

“While IAG has enjoyed a rewarding partnership with AHI, we recognised there is an opportunity for AHI to expand beyond IAG’s focus of Australia and New Zealand and that Tokio Marine is a more natural owner of AHI to support its growth ambitions,” EM Broker and Agency Brad Robson said.

IAG’s decision is a good illustration of changes taking place across the industry.

Tokio Marine is keen to expand in the region, while IAG is confining its activities to the Australian and New Zealand markets, and sources have told insuranceNEWS.com.au AHI’s business is not seen as a key product line for the insurer.

“If the focus to build the business isn’t there and the price is right, the deal is a good one for both parties and for AHI,” one manager working in the sector said.

In April Tokio Marine acquired specialist underwriting agency Bond & Credit Company, which recorded GWP of $36 million in the 2018 financial year. That business employs 24 people and has offices in Sydney and Melbourne.

Purchase prices for the acquisitions were not disclosed.