SCOR acquires Generali’s US life unit
French reinsurer SCOR has acquired the US life reinsurance operations of Assicurazioni Generali for €579m ($750m) plus a 2013 earnings adjustment via SCOR Global Life Americas Holding, one of its subsidiaries.
Generali US was ranked as the fourth largest life reinsurer in the US on 2012 based on recurring new business volume. As a result of the acquisition, SCOR’s US life operations are expected to be the biggest in the US by both new business and in-force volume.
The deal will be financed by SCOR through the use of own funds and a potential limited debt issuance, without the issuance of new shares.
SCOR said the price represents a significant discount to its preliminary estimated embedded value of the Generali portfolio. Generali US’s 2012 net earned premiums were some €700m, all underwritten in the US and all focused on biometric risks – a similar portfolio to that held by SCOR Global Life Americas.
SCOR said the acquisition will add a well-established franchise, client relationships, skills and infrastructure that will benefit both its US and worldwide life businesses.
“The acquisition of Generali US reinforces our leadership in the life reinsurance market,” said Denis Kessler, chief executive of SCOR. “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.
“The transaction meets our strategic criteria and will be accretive for our shareholders whilst maintaining SCOR’s overall solvency. Thanks to this acquisition, we continue to build on our acquisitions of Revios in 2006 and the mortality business of Transamerica Re in 2011, in order to provide the best possible product and service offering to our Life insurance clients worldwide.”
BNP Paribas and Deutsche Bank acted as financial advisers to SCOR and Skadden, Arps, Slate, Meagher & Flom was the legal adviser.