Mitsui Sumitomo confirms Transverse buyout

Mitsui Sumitomo has agreed to acquire fronting company Transverse. The acquisition is a step towards further building out MSI’s US presence and generating revenue diversification by accessing the specialist managing general agent, wholesale and other broker-led distribution channels for property, casualty, marine, and specialty business.

Completion of the acquisition is subject to customary closing conditions, including the receipt of regulatory approvals.

Based in Warren, New Jersey, Transverse, is a US-based hybrid fronting company, founded in 2018 by Erik Matson and Dave Paulsson together with Virgo Investment Group.

It links producers and (re)insurers to underwrite domestic US risks on an admitted or excess and surplus (E&S) lines basis. Its recent growth trajectory and robust pipeline of MGA partners have allowed it to capture a meaningful share of the US fronting market in a short space of time.

Tamaki Kawate, director, head of International Business of MSI and Johan Slabbert, chairman & CEO of MS Amlin Distribution Holdings Inc., said, “This acquisition marks the start of a new phase for MSI as a market-leading global (re)insurance business.

”It not only demonstrates our commitment to sustainable growth in the US but highlights our differentiated proposition with the stability and financial strength of our parent company.

”This acquisition will allow Transverse to accelerate its competitive advantage by securing greater access to product lines and new distribution opportunities, serving the evolving and long-term needs of its MGAs and (re)insurer partners more effectively.”

Erik Matson, chairman, CEO, Co-Founder of Transverse added: “This acquisition cements the success of our business and reiterates the value of our hybrid fronting model as a valuable tool that allows our partners to maximise the market cycle.”

The growth of the US hybrid fronting industry outpaced other segments at 30% during 2016 – 2021, driven by the underlying demand and growth in the E&S markets. 

MSI’s ownership of Transverse strategically expands its presence in the US market and provides rapid and flexible access to this fast-growing market by gaining both fronting and underwriting income from Transverse and its established network.