Bermuda-based specialist insurer and reinsurer Hiscox is to buy online insurer DirectAsia from Singapore-headquartered insurance services and investment group Whittington.
Hiscox is paying $55m for DirectAsia, plus an earnout over four years.
DirectAsia has more than 54,000 customers and had gross written premiums of $25.3m in 2013.
Hiscox CEO Bronek Masojada said that DirectAsia was "a challenger brand with real potential", and that it complemented Hiscox's direct-to-consumer business in Europe and the US. Hiscox eventually plans to use DirectAsia to sell Hiscox products.
DirectAsia will retain its brand and management team, to be led by Steve Langan – Hiscox UK and Europe MD, and now also CEO of DirectAsia Group.
Whittington CEO Anthony Hobrow said that the company was "very pleased to pass this unique platform to Hiscox", which he said could provide the expertise and capital needed.
Whittington launched DirectAsia in mid-2010, offering motor, travel, home and personal accident insurance directly to the consumer. At the time Whittington noted that in Asia nearly all personal insurance was still sold via agents, although small inroads had been made in Japan and South Korea. Munich Re provided the reinsurance backing for DirectAsia, which from November 2010 was led by Simon Birch. Munich Re continues to provide reinsurance backing.
The announced sale by Whittington represents another change in direction for the company, which demerged from Omni in 2006. It gradually shifted the focus of its operations to Singapore, culminating in an announcement in early 2011 that its London operations, including its Lloyd's managing agency, was up for sale. London was also the home of Whittington's "incubation" business, serving as a second-stage financer of new and growing insurance operations. Since May 2012 Whitting UK has been branded Asta Capital Ltd.
At that time it appeared that DirectAsia was to be the future focus for Whittington. Hobrow told Business Times Singapore that it had sold some 10,000 policies in its first nine months of operation, mainly in motor. DirectAsia moved into Hong Kong in 2012 and into Thailand in the middle of last year.
What is unclear is where this leaves Whittington in Singapore. DirectAsia had become very much its focus Its GWP for 2012 was $19.33m, nearly all of which would have come from DirectAsia. It retaine $9.84m in net earned premiums. In 2012 the privately held company booked a $28.1m loss from continuing operations (up from $10.1m the previous year), but recorded a gain of $30.1m from discontinued operations. That pushed it to a profit of $2.0m for 2012, compared with a loss in 2011.