Reinsurance giant Swiss Re believes that reducing its stake in UK closed life book consolidator ReAssure via an initial public offering (IPO) will facilitate increased flexibility and growth of the group.
An IPO registration document for the ReAssure Group plc share offering is due to be filed today, pending the approval of the UK’s Financial Conduct Authority, Swiss Re said this morning.
ReAssure is the sixth largest life insurance group in the United Kingdom (measured by total assets as at 31 December 2017 and on a Post-L&G Illustrative Basis) and also has operations in Ireland.
In a regulatory document released today Swiss Re states that an IPO would reduce the extent to which it is subject to specific constraints such as market risk limits and the Swiss Solvency Test capital framework.
Furthermore, an IPO would widen the company’s access to capital in the future, as well as enable the selling shareholder to realise part of its investment in the group.
Commenting on the benefits this IPO could have on ReAssure moving forward, Chairman Archie Kane said, “Today’s announcement marks a milestone in our corporate development. ReAssure is a scale player with a proven track record. We have developed a valuable franchise with the potential for significant future growth in the UK closed book markets.”
“Our focused business model and highly-experienced management team put us in a powerful position to deliver attractive returns. I am pleased that we have assembled a diverse Board with a depth of experience which will provide strong strategic guidance and governance going forward. I am grateful to our existing shareholders, Swiss Re and MS&AD, for their continued support.”
Mark Hodges, Chief Executive of ReAssure, added, “ReAssure has been highly successful, as part of one of the world’s largest reinsurance companies. Our long-term success has been founded on positive customer outcomes. Today I am delighted we are taking the next and natural step for this business, exploring a potential IPO.
“ReAssure has a long history of value creating M&A deals and the generation of sustainable and resilient cash flows. We believe this will underpin attractive returns to shareholders. We see growth opportunities through further consolidation of closed life and pension books in the UK.
“Our track record, proprietary operating system and focus on the customer, are capabilities that will support our growth. A potential IPO would provide us with additional flexibility to take advantage of the opportunities we see.”