UK life re/insurance entrepreneur Clive Cowdery has said that his latest venture, Resolution Life Group (RLG), will aim to compete with leading global reinsurers such as Swiss Re and Munich Re, according to Reuters.
Shortly after RLG was formed in September, the company reinsured $5.7 billion in annuities from U.S company Symetra Life, which is owned by Japan’s Sumitomo Life Insurance Company.
This maiden deal was backed by $1 billion in capital and represents the first step on the road to competition with larger players, Cowdery said.
Reuters reported that Cowdery is now looking to acquire a company that will cost around $2 billion using the bulk of the money RLG has raised from investors, which is expected to be completed by the end of the year.
Cowdery is regarded as having pioneered the practice of buying up closed books in Britain and the U.S, and acquired around $20 billion of the $50 billion of assets sold by insurers to date through his Resolution Plc vehicle and its various entities, more than any other single buyer.
Recently, dealmaking has subsided due to low interest rates, which have reduced the prices insurers might attract for their assets, but the launch of RLG is meant to coincide with a fresh wave of disposals.
“There has been a sharp pick-up in the numbers of companies looking to sell,” Cowdery told Reuters, citing the breaching of 3% in the U.S 10-year Treasury Bill yield as a trigger.
RLG also marks a change in strategy for Cowdery, as it has the scope to acquire businesses in multiple countries and reinsure old policies, as well as take over rivals.
It will also allow Cowdery to have more freedom to invest than his previous venture because it can tap a permanent pool of shareholder equity, Reuters noted.
Cowdery stated that he intends to grow RLG to around $5 billion of assets before a stock market listing of the company in either the UK or U.S in three to five years.
“The market has a few billion dollars worth of deals a year… you’d hope to deploy a minimum of a billion dollars a year thereafter, in the public markets,” he told Reuters. “It’s a long-term plan.”