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Munich Re and Axa XL among losers from Tokio Marine-Pure deal

Pure’s reinsurance partners and reinsurance brokers are likely to lose out on business in the aftermath of the high-net-worth (HNW) specialist’s takeover by Tokio Marine, according to analysis from sister publication Inside P&C.

Last week, the Japanese big-three carrier announced that it was to acquire the HNW specialist for $3.1bn.

Pure currently cedes the majority of its risk to the reinsurance market. However, with a $200bn balance sheet, Tokio Marine is likely to retain a significant portion of Pure’s $666mn of 2018 ceded premium net – generating financial synergies from the deal.

Pure’s biggest reinsurance backers include Munich Re, Everest Re, Partner Re and Axa XL.


As the graphic above shows, Munich Re accepts the largest amount of ceded premium, at $131mn, which ran at a 48 percent loss ratio last year.

This is followed by the reinsurance operations of Axa XL, formerly Catlin Re, with $107mn, and Everest Re, with $90mn.

The findings are part of a full analysis into the takeover by Inside P&C.

The other key findings from this report are:

  • In line with prior transactions by Tokio, this is a simple bet on business quality. Pure has scarcity value and a higher-quality earnings stream from its fee-based business

  • Tokio Marine is also partly making a bet on HNW as a market niche

  • Given the growth estimates outlined by the company, Tokio Marine appears to assume that Pure’s market-share gains can continue in a growing market

  • This is largely an additive and strategic transaction rather than a cost-driven consolidation, although there are also financial synergies to be gained from the deal.

For the full pdf analysis on the Tokio Marine-Pure deal, click here.

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