Reinsurer claims the transaction will rank it number two in US
French reinsurer SCOR and Aegon have entered into an agreement in which SCOR will acquire the mortality risk reinsurance business of Transamerica Re.
As Transamerica Re is part of Aegon, but not as a legal entity, the acquisition includes a series of retrocession agreements from Aegon to SCOR Global Life US entities.
SCOR SE’s chairman and CEO, Denis Kessler, said: “This transaction relates only to biometric risks, and is fully consistent with SCOR’s strategy and risk appetite. The rebalancing of the life reinsurance book between the United States, Asia and Europe, while enlarging the group’s footprint and significantly expanding our global franchise, will also provide additional stability to the group."
As part of the acquisition, SCOR will also purchase from AEGON one Irish legal entity, which underwrites Transamerica Re business.
Aegon will transfer to SCOR €1.2bn ($1.8bn) of liabilities and corresponding assets in cash and/or securities in line with SCOR’s investment policy.
SCOR said in a statement that the total consideration for the acquired business amounts to approximately €630m ($912.5m). It includes an estimated statutory capital of around €340m ($497m) for the Irish entity.
Kessler continued: “This transaction will be financed through own funds and a potential limited debt issuance, without the issuance of new shares. It satisfies the Group’s profitability criteria and is expected to create value for SCOR’s shareholders.”
“This transaction paves the way towards a fruitful and long-lasting partnership with Aegon over the next fifteen years.”