By David Bull

July 2 - (The Insurer) - Korea’s DB Insurance has confirmed reports in the country that it is in negotiations to buy Fortegra but said no decision has been made on price or whether to proceed with an acquisition, despite due diligence having been completed.

The Korea Economic Daily reported on Tuesday that the carrier, which is part of Korean conglomerate DB Group, is in talks to buy U.S. insurer Fortegra in a deal that could be worth as much as $1.5 billion, citing people familiar with the matter.

The report said that the non-life insurer has recently completed due diligence and is now negotiating terms with Fortegra's New York-listed owner Tiptree.

It added that the parties are aiming to reach a final agreement by August, citing sources.

In a response filed with the Korean stock exchange on Tuesday, DB Insurance acknowledged the report and said that it has been expanding its business in various ways since entering the U.S. in 2009, based on a Google translation of the filing.

It added that Fortegra is “under review” as part of this expansion strategy but that DB Insurance is undecided on whether to acquire the business, or on price and terms, as it is currently engaged in negotiations after due diligence.

The filing said it would provide further disclosure when the relevant matters are decided, “or within one month”.

In January, The Insurer first reported that Fortegra and its owner Tiptree were appointing Barclays, BofA Securities and KBW to lead a sale process of the Warburg Pincus-backed specialty carrier after twice abandoning plans for an IPO.

Warburg Pincus paid $200 million to acquire a 24% stake in Fortegra in a deal that closed in early 2022 and which effectively valued the specialty insurance firm at north of $800 million. The private equity firm made an additional $40 million investment in Fortegra at the end of the second quarter of 2024.

Fortegra hit $3.07 billion of gross written premium and premium equivalents in 2024 and has grown its top line at a 23% compound annual growth rate over the past six years.

Last year’s 11.7% growth was driven by its specialty E&S insurance lines.

Its combined ratio for 2024 was 90.0%, a slight improvement on the 90.3% recorded in 2023. The company ended the year with stockholders’ equity of $625.5 million, up from $452.6 million at the end of 2023.

Fortegra declined to comment and Warburg Pincus did not immediately respond to a request for comment.