Hannover Re sells Clarendon
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Hannover Re sells Clarendon
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Hannover, 22 December 2010: Hannover Re reached agreement on the sale of all
operational companies of its US subsidiary Clarendon Insurance Group, Inc., New
York, to the Bermuda-based Enstar Group Ltd., Hamilton. The purchase price is in
the order of USD 200 million. This is equivalent to roughly 80% of the statutory
equity of Clarendon.
The sale of Clarendon offers clear benefits for both contracting parties: the
transaction affords relief to Hannover Re's balance sheet and frees up cash.
What is more, the sale reduces the level of reinsurance recoverables. The Enstar
Group, which specialises in the run-off of insurance and reinsurance companies,
will for its part have the opportunity to run this portfolio off profitably
through economies of scale.
"With the sale of Clarendon we are parting with a subsidiary that has been in
run-off since 2005 and thereby freeing up resources that can be used to further
grow our core business", Chief Executive Officer Ulrich Wallin explained.
Hannover Re had already parted with its active US primary insurance business in
2006 through the sale of Praetorian, for which it obtained a purchase price of
USD 800 million at that time.
By disposing of Clarendon Hannover Re is also able, most significantly, to free
itself from the operational risks associated with the run-off of a US insurer
and from the considerable administrative expenses that would have been incurred
in subsequent years. These future savings explain the mark-down on the company's
book value. Also for this reason, in particular, the sale of Clarendon will
cause a strain on the result in the current year - in an amount probably running
into the mid-double-digit million euro range. The company nevertheless expects
to be able to offset this from the profit on ordinary activities.
In terms of Group net income, it remains Hannover Re's expectation that a post-
tax profit of more than EUR 700 million can be generated for 2010.
The transaction is still subject to customary regulatory approvals. The closing
is anticipated in the second quarter of 2011.
J.P. Morgan Securities acted as exclusive financial advisor to Hannover Re on
this transaction.
For further information please contact:
Corporate Communications:
Karl Steinle (tel. +49 511 5604-1500,
e-mail: karl.steinle(at)hannover-re.com)
Investor Relations:
Klaus Paesler (tel. +49 511 5604-1736,
e-mail: klaus.paesler(at)hannover-re.com)
Please visit: www.hannover-re.com
Hannover Re, with a gross premium of around EUR 10 billion, is the third-largest
reinsurer in the world. It transacts all lines of non-life and life and health
reinsurance. It maintains business relations with more than 5,000 insurance
companies in about 150 countries. Its worldwide network consists of more than
100 subsidiaries, branch and representative offices on all five continents with
a total staff of roughly 2,100. The rating agencies most relevant to the
insurance industry have awarded Hannover Re very strong insurer financial
strength ratings (Standard & Poor's AA- "Very Strong" and A.M. Best A
"Excellent").
Disclaimer:
Some of the statements in this press release may be forward-looking statements
or statements of future expectations based on currently available information.
Such statements are naturally subject to risks and uncertainties. Factors such
as the development of general economic conditions, future market conditions,
unusual catastrophic loss events, changes in the capital markets and other
circumstances may cause the actual events or results to be materially different
from those anticipated by such statements. Hannover Re does not make any
representation or warranty, express or implied, as to the accuracy, completeness
or updated status of such statements. Therefore, in no case whatsoever will
Hannover Re and its affiliate companies be liable to anyone for any decision
made or action taken in conjunction with the information and/or statements in
this press release or for any related damages.
--- End of Message ---
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Source: Hannover Rück via Thomson Reuters ONE
[HUG#1475003]
Unternehmensinformation / Kurzprofil:
Datum: 22.12.2010 - 14:00 Uhr
Sprache: Deutsch
News-ID 50008
Anzahl Zeichen: 5445
contact information:
Town:
Hannover
Kategorie:
Business News
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