Sompo International Holdings has agreed to acquire Service Insurance Companies, a specialist workers’ compensation insurer, in a deal aimed at strengthening its US commercial insurance platform.
The Bermuda-based global insurer said one of its US subsidiaries has entered into a definitive agreement to acquire Service Insurance Companies, a monoline workers’ compensation carrier focused on the small and medium-sized enterprise market. Terms of the transaction were not disclosed.
The deal remains subject to regulatory approvals and other customary closing conditions.
Service Insurance Companies, founded in 1982, specializes exclusively in workers’ compensation coverage and provides underwriting, claims management and loss control services. The company’s platform includes Service Lloyds Insurance Company and Service American Indemnity Company.
Sompo said the acquisition will expand its workers’ compensation capabilities, distribution reach and scale in the US market, while giving the insurer a broader foothold in the general agents marketplace.
“Together with Service Insurance Companies’ seasoned leadership team and proven workers’ compensation platform, Sompo is establishing a top-tier flagship for our workers’ compensation business,” said Chris Sparro (pictured on the right), chief executive officer, North America, Sompo Commercial P&C Insurance.
“This brings a tremendous opportunity to deliver even greater long-term value to our clients, distribution partners and stakeholders – further advancing our differentiated position in the US commercial insurance market.”
Brad Davis (pictured on the left), president of Service Insurance Companies, will continue to lead the business under Sompo ownership.
“We are thrilled at the opportunity to align with Sompo’s North America leadership team, financial support and strong market presence,” Davis said. “Together with Sompo, Service Insurance Companies is better positioned to extend the reach from a monoline workers’ compensation provider into a diversified commercial insurance organization with enhanced scale, capabilities and amplified market relevance.”
The acquisition comes as workers’ compensation remains one of the more profitable and competitive segments of the US property and casualty market.
Industry data has pointed to continued underwriting strength in the line, supported by favorable loss experience, declining claim frequency and reserve redundancy, even as wage growth and payroll trends continue to influence premium volume.
For Sompo, the deal builds on a broader strategy to expand its international commercial insurance presence. Sompo operates global property, casualty, specialty insurance and reinsurance businesses, and is backed by parent company Sompo Holdings, Inc., one of Japan’s major P&C insurance groups.
The company has also been active in expanding its global specialty and commercial insurance capabilities, including its recent move to acquire Aspen Insurance.
