Chaucer takeover by China Re receives approval

The European Commission has approved the acquisition of Chaucer by China Reinsurance Group Corporation on December 18.

China’s biggest reinsurer China Re is acquiring speciality insurer Chaucer from its parent The Hanover Insurance Group for $950 million in a deal that gives the buyer a solid foothold in both the speciality markets and in Lloyd’s.

Chaucer is a specialty insurance group, operating in insurance and reinsurance classes, underwriting across international marine and non-marine markets through Syndicate 1084, and Syndicate 1176, an insurer of nuclear risk.

For China Re, the deal will increase its global diversification and give it access to the Lloyd’s market; for Chaucer, the partnership could also open up opportunities for growth and diversification in Asia.

The deal gives “rise to horizontal overlaps between the companies' activities,” but the European Commission concluded that it would raise no competition concerns given the companies' “limited combined market positions resulting from the proposed acquisition”.