Run-off: A run-off deal round-up
>> Representing something of a typical deal, specialist run-off acquirer and manager AXA Liabilities Managers acquired the run-off portfolio of Düsseldorf-based German insurer Provinzial Rheinland.
The deal, made through AXA Liabilities Managers’ investment vehicle AXA Discontinued Business Investment Opportunities, which invests in run-off acquisitions, marked AXA’s 16th acquisition and its 10th with a German seller.
Sylvain Villeroy de Galhau, CEO of AXA Liabilities Managers, commented that AXA had ‘won’ the deal in the face of intense competition.
“This deal was won after competing with other run-off players, which confirms AXA Liabilities Managers’ attractiveness for sellers and positions us as a strong competitor in the run-off market,” he said.
>> Meanwhile, re/insurance legacy specialist Compre has completed several acquisitions in 2017.
It acquired the re/insurance business in run-off underwritten by RW Gibbon Underwriting Agencies and the Gibbon pools in the years 1950–1972 from Swiss Re International, the Luxembourg-based subsidiary of Swiss Re Corporate Solutions.
The acquisition represented Compre’s 23rd portfolio deal and to date Compre has acquired 10 companies in run-off.
It also acquired Wüstenrot & Württembergische’s (W&W) Ridgwell Fox & Partners (RFP) pool legacy reinsurance business.
Compre has provided W&W with complete finality regarding its involvement with RFP. The transaction is approved by German regulator BaFin.
Nick Steer, chief executive officer of Compre, noted when first deal was completed: “Demand for portfolio transfer deals in continental Europe is certainly increasing as companies better understand the implications of Solvency II and look to focus on their core businesses and release capital tied up in supporting legacy liabilities.”
>> Some deals have also emerged in the captives space. Earlier this year, Randall & Quilter (R&Q), the insurance services and investment company, acquired two captive insurance firms, Linco and ICDC, both of which are in run-off.
Linco is a wholly owned captive insurer of Ameripride Services and Alsco which is based in Bermuda. It went into run-off at the start of 1985 and provided reinsurance coverage to its shareholders for workers’ compensation, general and automotive liability.
“We are delighted to complete the acquisition of ICDC from an American Fortune 500 company,” said Ken Randall, R&Q’s chairman and chief executive officer. “This transaction demonstrates our ongoing commitment to continue to acquire legacy insurance assets and continues to expand our acquisition activity in the North America, Bermuda and the Caribbean region.”
>> Another notable deal was when European run-off company DARAG entered an agreement to acquire all shares of Stockholm-based Swedish insurance company Ikano Försäkring, a part of Ikano Group.
The deal will provide Ikano with legal and economical finality with regard to its insurance business, the company said in a statement. The share purchase agreement is subject to the regulatory approval of the Swedish Financial Supervisory Authority (SFSA) in Stockholm.
Headquartered in Luxembourg, the Ikano Group operates across finance, insurance, production, real estate and retail.
“This transaction is a great beginning to a very promising year,” said Zsolt Szalkai, group chief liability officer. “We firmly believe that the legacy market in Europe will reach new heights in 2017, as the re/insurance industry continues to acknowledge run-off solutions as a natural element of the insurance lifecycle, one that helps them reduce costs, manage volatility and achieve capital efficiencies.”
