CEO Neill Currie says "time is right to exit" US insurance operations
Bermuda-based reinsurer RenaissanceRe has agreed to sell its US insurance operations to Australian insurer QBE.
The definitive agreement includes RenRe’s U.S. property and casualty business underwritten through managing general agents, its crop insurance business underwritten through Agro and its commercial property insurance operation.
The transaction will be at year-end GAAP book value, currently estimated to be $275m, payable in cash at closing.
This acquisiton comes after QBE reached an agreement with KBC Group in July to buy Belgium-based specialist reinsurer Secura for €267m.
Neill Currie, CEO of RenaissanceRe Holdings Ltd., said: " We believe the time is right for us to exit in light of the relatively small scale of our U.S.-based insurance operations in an environment that currently favors consolidation in certain U.S. insurance lines."
Currie added: "We will continue to participate in the U.S. excess and surplus lines insurance market through our Lloyd's platform and Glencoe Insurance Ltd., our Bermuda-domiciled insurer.”
QBE chief executive Frank O'Halloran added: “The acquisition is in line with our strategy of acquiring specialist businesses to further enhance our product diversification and distribution. The acquisition is complementary to the NAU crop insurance business announced in June this year. The acquisition is expected to be earnings per share accretive in year one, subject to the usual caveats.”
The transaction is expected to close in March 2011, and is subject to regulatory approvals and customary closing conditions.