Transatlantic Holdings Inc. (TRH), the reinsurer previously owned by American International Group Inc. (AIG), will combine with Switzerland’s Allied World Assurance Company Holdings AG to increase business outside North America.

Transatlantic shareholders will own 58 percent of the combined company, to be called TransAllied Group Holdings AG, the firms said today in a statement distributed by Business Wire.

“The transaction delivers strategic and financial benefits, including primary insurance operations, a Lloyd’s presence and a bigger capital base outside the U.S.,” Robert Orlich, chief executive officer of New York-based Transatlantic, said in the statement.

Mid-sized reinsurers have been combining to gain scale. Max Capital Group Ltd., the reinsurer co-founded by Louis Moore Bacon, merged last year with rival Harbor Point Ltd. to form Alterra Capital Holdings Ltd.

Scott Carmilani, chairman and CEO of Zug, Switzerland-based Allied World, will be president and CEO of the combined company and Orlich will retire once the deal is completed, according to the statement.

source : bloomberg