UPDATE: Hannover Re Buys US Life Reinsurance Portfolio
23 Enero 2009 - 3:20AM
Noticias Dow Jones
Germany's Hannover Re AG (HNR1.XE), one of the five largest
reinsurers worldwide, Friday said it is acquiring a U.S. individual
life reinsurance portfolio from Bermuda-based reinsurer Scottish Re
Grp Ltd. (SKRRF) in a reinsurance and asset purchase
transaction.
Hannover Re said it will assume all liabilities of the
portfolio, dubbed ING Business, and will in turn receive assets
from Scottish Re to fund those liabilities.
As part of the transaction, Hannover Re will also buy policy
administration systems from Scottish Re, and other assets
supporting the U.S. life reinsurance business.
Hannover Re said it won't need external funding to complete the
transaction, that the acquisition of the portfolio will be
net-profit accretive from 2009 and is expected to close in the
first quarter.
ING Business, was originally bought by Scottish Re from ING
Groep NV (ING) in 2004. Effectively, Hannover Re is replacing
Scottish Re as reinsurer for the ING U.S. life reinsurance
portfolio, a Hannover Re spokesman said.
Reinsurers such as Hannover Re, Munich Re AG (MUV2.XE) or Swiss
Re Co. (RUKN.VX) reinsure primary insurers like Allianz SE (AZ), so
the latter can take more risks on their books.
In 2009, this business is expected to generate a premium volume
of around $1.2 billion and will result in Hannover Re moving up to
the number five position in terms of individual life reinsurance
in-force in the U.S., it said.
"This is a transformational step for our global life reinsurance
ambitions," said Hannover Re Chief Executive Wilhelm Zeller. "It
contributes a large block of business in force, together with
industry-leading capabilities in mortality research, pricing,
underwriting and reinsurance administration which will
substantially increase our presence and earnings from the U.S.
mortality risk market ..."
The acquisition includes all operating assets required to
administer the portfolio. Hannover Re will also employ part of
Scottish Re's staff, ensuring operational continuity and a transfer
of know-how.
Scottish Re said in a press release on its Web site that it
"originally had targeted a sale of its entire North American
Segment, but following the historic disruption in the financial
markets in late September, it was unable to consummate such a
transaction."
In an effort to find ways to address its acute capital,
liquidity and collateral needs and to allay regulatory concerns,
Scottish Re pursued the sale of a specific block of individual life
reinsurance in its North America Segment, the company said.
"This transaction is the next step in Scottish Re's previously
disclosed change to its strategic focus to preserve capital and
mitigate growing liquidity demands," said Scottish Re Chief
Executive Paul Goldean.
At 0835 GMT, Hannover Re shares were down slightly at
EUR20.72.
Company Web sites: www.hannover-re.com
www.scottishre.com
-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500;
ulrike.dauer@dowjones.com
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