RenaissanceRe
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Why would a patient Japanese owner spend 18 years building a diversified reinsurer from scratch then discard it for a bargain price?
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Acquirer will also substantially shrink the portfolio and use third-party capital to support the book.
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The $1.5bn takeover agreement diminishes the chances RenRe itself will become a bid target.
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RenRe said the deal was additive to its existing platform and will be financially accretive for shareholders. -
The TMR deal will act as an effective poison pill to any would-be acquirer.
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The deal makes RenRe the fourth-largest Bermuda reinsurer and gives it significant clout as a fronting provider for ILS managers.
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The Bermuda-based reinsurer’s high net investment income offset its loss on underwriting.
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The reinsurer turns buyer rather than seller after facing pressure from an activist investor to consider a sale.
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Although estimates for the Q3 disasters vary, in aggregate the events are likely to generate insured losses north of $10bn.
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Almost two-thirds of the losses are expected to stem from homeowners’ claims.
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The Bermudian is facing $155mn of Q3 cat claims, and shareholders can expect “modest net income” when the company posts its results for the period.
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Reinsurers now have fresh impetus to argue for flat renewals at 1 January.
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