Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of specialty insurer Transatlantic Holdings (NYSE: TRH) climbed 10% after announcing plans to combine with Allied World Assurance (NYSE: AWH) in a deal valued at $3.2 billion.

So what: The deal is being structured as a "merger of equals," with Transatlantic shareholders receiving 0.88 Allied World shares, or $51.10 per share, representing a 16% premium over its Friday closing price. Today's announcement continues the recent trend of midsized reinsurers hooking up to gain scale, as well as geographic and product diversification.

Now what: The new couple will certainly be worth following. Upon the completion of the deal, the combined company will have a total of $21 billion in invested assets, shareholders' equity of nearly $7 billion, and total capital of $8.5 billion, which, in turn, should put it in a stronger competitive position going forward. Couple that larger scale with a likely decrease in earnings volatility, and conservative investors might have an ideal way to invest in the space.

Interested in more info on Transatlantic? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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