Swiss Re has confirmed that the initial public offering (IPO) of shares in its UK closed life book consolidator business ReAssure is set to go ahead in July 2019.
ReAssure verified in a statement today that its ordinary shares will be listed on the main market of the London Stock Exchange next month.
Swiss Re originally announced back in August 2018 that it was considering an IPO for the ReAssure business, but has been discussing the possibility of bringing new, third-party capital in to the closed life book business under Admin Re since 2013.
ReAssure is focused exclusively on the acquisition and management of closed books of life insurance policies, seeking to consolidate multiple books into one portfolio and generate efficiencies through better management and by leveraging the strength of Swiss Re’s overall group-wide capacity.
An IPO of ReAssure’s shares provides a route to bring fresh capital into the business, providing working capital to put into new transactions and grow the UK life insurance book under the brand.
Economies of scale matter in the closed book consolidator business and a fresh capital injection could help Swiss Re to add scale to ReAssure, while not putting more of its own capital into that business.
Additionally, the IPO would be an opportunity for investors to back the business and benefit from the returns possible in this area of life insurance, under a Swiss Re owned brand, which could be attractive.
Swiss Re explained last week that the IPO would also facilitate increased flexibility and growth for the group, and indicated that it was eyeing further consolidation of closed life and pension books in the UK.
Analysts have suggested that Swiss Re could save as much as $4 billion from an IPO of ReAssure, if it took the opportunity to sell down its stake to a level where it was simply an equity holding risk to the firm.
