Generali has entered into an agreement to sell the non-life run-off portfolio of its UK and U.S. branches consisting of about €300 million of liabilities to discontinued business specialists Compre Group.
The transaction is structured as an upfront reinsurance solution by way of a Loss Portfolio Transfer for both branches.
Legal business transfer for the liabilities of the UK branch portfolio will follow, subject to regulatory approval.
The U.S. branch will remain as a longer-term reinsurance solution until suitable legal transfer mechanisms become more widely available in the U.S.
Luigi Lubelli, Group Chief Financial Officer, said the transaction, which attracted a high level of interest from the market, is “another step forward in our efforts to optimize the Group’s capital allocation.
“It allows Generali to release capital, reduce costs, and remove the potential source of volatility inherent in such long-tail business lines.
“Further, it shows that Generali is committed to reallocate its capital where it can best be used, going beyond the current global review of its markets.”
Generali Group Chief Executive Officer (CEO) Global Business Lines & International, Frédéric de Courtois, said the deal is instrumental in further increasing the operational efficiency of the carrier and strengthening its Economic Solvency capital position.
“The Group is committed to the UK business through our Generali Global Corporate & Commercial unit that develops Property & Casualty business and insurance services for mid- to large-sized companies Generali Global Health with its coordination center in London and our UK Employee Benefits business, part of the Generali Employee Benefits network, that provides coverage to individuals working in firms ranging from mid-sized companies to global conglomerates,” de Courtois added.
The deal takes the total number of portfolios Compre has acquired to 29, in addition to its acquisition of 11 companies with discontinued business.
Nick Steer, CEO of Compre, commented that “in acquiring these portfolios Compre has completed its largest deal to date and our first with an Italian counterparty.
“Competing successfully in such a highly competitive process clearly demonstrates our appetite and ability to undertake larger-scale transactions and the high regard in which Compre is held by highly reputable re/insurers across Europe.”