Italian insurer Generali to sell US life reinsurance business to Scor for $920 mn
04 June 2013
Italy's biggest insurer Generali today said that it will sell its US life reinsurance business to France's Scor for $920 million as part of its plan of hiving off non-core assets.
Under the terms of the transaction, Scor will pay $780 million in cash at closing and release $140 million of collateral now locked in the business.
The sale is expected to generate a capital gain net of taxes of approximately $150 million on a consolidated basis for Generali, further strengthening its liquidity position and improving the solvency I ratio by approximately 1 percentage point.
''We continue to make steady progress in our strategy of disposing of non-core assets and strengthening the Group's capital position. The sale of Generali US is a further step in the transformation of our Group and delivering against the goal of re-focusing on our core insurance business,'' said, Mario Greco, CEO of Generali.
The transaction includes Generali US and its operating subsidiaries, including Generali USA Life Reassurance Company, which employs a staff of approximately 120 in Kansas City; and the recapture of the retrocession agreements between Generali USA and Generali.
Generali US's 2012 net earned premiums amounted to approximately $900 million, all underwritten in the US and all focused on biometric risks, similar to SCOR Global Life Americas existing business. Generali US ranked as the fourth largest Life reinsurer in the US on 2012 recurring new business volume.
''The acquisition of Generali US will add a well-established and highly regarded franchise, client relationships, skills and infrastructure for the benefit of Scor's US and worldwide Life business,'' Scor said in a statement.
''The acquisition of Generali US reinforces our leadership in the Life reinsurance market. The combination of Scor Global Life Americas and Generali US will become the market leader in the US with a franchise focused on mortality risks, said Denis Kessler, chairman and CEO of Scor.