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ReAssure to float in London as part of spin-out from parent Swiss Re

Published: 17:37 07 Jun 2019 AEST

insurance
As a closed-book life insurance consolidator, ReAssure buys up and manages policies that other insurers no longer want

ReAssure Group PLC, Swiss Re’s UK-focused closed-book life insurance consolidator, is to be spun out from its giant parent and floated on the London Stock Exchange for a valuation that could make it large enough for the FTSE 250. 

The company said it was “considering proceeding with an initial public offer” where Swiss Re will keep a large stake, but it will need to have a free float of at least 25% of the shares if it aims to list on the LSE’s main market.

Valuation and assets

Japanese financial conglomerate MS&AD Holdings also owns a 20% stake in ReAssure as of December, when the valuation of the UK business was given as £3.5bn. 

ReAssure, which buys up and manages life insurance policies from other insurers, has 4.3mln policies and £68.7bn of assets under administration, making it the sixth largest life insurance group in the UK by total assets.

If it floats it will join fellow listed closed-book life insurance consolidators Phoenix Group Holdings (LON:PHNX), valued at around £5bn, and £0.5bn valued Chesnara PLC (LON:CSN).

In a statement on Friday, ReAssure said it was well positioned to benefit from “significant closed book market opportunities” and has a five-year target to generate a cumulative surplus of £2.1bn, and from 2024 onwards of £4.1bn.

This includes an agreed but still pending deal to buy Legal & General’s £650mln mature savings business via a risk transfer structure.

Board experience

ReAssure chairman Archie Kane, former chairman of the Bank of Ireland and the Association of British Insurers, said the announcement was “a milestone in the our corporate development”.

“We have developed a valuable franchise with the potential for significant future growth in the UK closed book markets. Our focused business model and highly-experienced management team put us in a powerful position to deliver attractive returns.”

The board also includes non-executive representatives from Swiss Re and MS&AD, together with chief executive Mark Hodges, previously CEO of Aviva UK and of Centrica's consumer division, and finance chief Ian Patrick, ex CFO of Swiss Re’s Life Capital arm.

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