Swiss Re sells its US Admin Re® holding company (REALIC) to Jackson National Life Insurance for USD 0.6 billion in cash
Swiss Re’s total cash proceeds from the sale including a pre-closing dividend will be USD 0.9 billion which is expected to be paid to Swiss Re Ltd
Transaction follows the strategic priority of unlocking capital and monetising value in Admin Re®, supporting Swiss Re’s financial targets
Swiss Re remains committed to being a recognised force in the closed life book business with focus on UK and Continental Europe
Swiss Re announces the sale of its US Admin Re® business (REALIC) to Jackson National Life Insurance, subject to regulatory approval. Admin Re® expects an estimated US GAAP loss of USD 0.9 billion related to the transaction, which will be booked in the second quarter 2012. The US GAAP loss will be finalised at closing.
Swiss Re announces the sale of its US Admin Re® holding company (Reassure America Life Insurance Company, REALIC) to Jackson National Life Insurance for a cash payment of USD 0.6 billion. The transaction, which is expected to close in the second half of the year, remains subject to regulatory approvals. Swiss Re will retain certain blocks of business.
Swiss Re Executive Committee Member and Chairman of Admin Re® David Blumer says: “After conducting a thorough review of the Admin Re® portfolio and evaluating the level of capital allocated to the Admin Re® US business, we concluded that we should redeploy the capital in other parts of our business.”
The transaction is expected to result in a dividend of USD 0.9 billion in cash to Swiss Re Ltd, thus unlocking capital for re-deployment across the Swiss Re Group. The divestiture further demonstrates management’s commitment to a key element of Admin Re’s® strategy, which is to focus on consistent and systematic management of the portfolio of blocks of business and value extraction. This is aligned with Swiss Re’s Group strategy.
Swiss Re Group Chief Executive Michel M. Liès says: “We consistently said the Group’s 2011-2015 financial targets are our top priority. Redeploying the funds freed up through this transaction within the Swiss Re Group will have a beneficial impact on all three of our financial targets in the future, that is to say return on equity, earnings per share and economic net worth growth.”
Swiss Re sees attractive growth potential in the UK and Continental Europe. Consequently, Admin Re® will focus on these active areas with insurance deal-flow as well as higher profitability.
“Swiss Re is committed to being a recognised force in the closed life book business through the Admin Re® Business Unit. By executing transactions in select markets that meet our strict hurdle rates, Admin Re® can continue to extend its global market presence, while further strengthening its class-leading asset and capital management disciplines,” says Michel M. Liès.
