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July 23, 2009
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On July 22, 2009, Max Specialty Insurance announced the addition of Puerto Rico to the existing 49 states in which Max Specialty operated. The approval completes licensing in all 50 states; now, Max Specialty can write business on a non-admitted basis in all the states. The addition of Puerto Rico would enable Max America to be a leader in the US marine and specialty markets.
Max America, a subsidiary of Max Specialty, was acquired in June 2008. The acquisition helped the latter to underwrite business on an admitted as well as a non-admitted basis.
Continuing with its long term strategic initiative of building franchise, Max Specialty had been acquired by Max Capital Group (MXGL) in April 2007. The acquisition helped the company to expand into excess and surplus lines business in the United States.
Max Capital is expected to release second quarter results on August 3, 2009. Last year, management announced its expectation of 20–22% increase in gross written premium in 2009. Strong growth was observed in the last quarter across virtually every product area. Growth in the gross premiums written was primarily driven by the expansion of Max’s global reach in the U.S. and at Lloyd’s. However, management’s forecast of premium growth in the rest of 2009 and release of funds from the reduction of alternative investments would help the top and bottom lines.
Overall, we believe that additional capacity, together with the growth in underwriting platforms, position MXGL favorably to capitalize on this improved pricing environment. Thus, we maintain a Hold rating on the shares of the company.
Read the full analyst report on "MXGL"
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