Global reinsurance firm Swiss Re has taken a further minority investment from insurance holding company MS&AD into ReAssure, taking the Japanese firms stake to 25%.
MS&AD Insurance Group Holdings Inc (MS&AD) already holds around 15% of the shares in Swiss Re’s UK closed life book consolidator ReAssure, having bought into the vehicle earlier this year.
Swiss Re’s plan had always been to take in third-party financing to help capitalise ReAssure, with the long-term goal being an initial public offering (IPO) of its shares.
MS&AD is set to invest a further £315 million into ReAssure, taking its stake in the firm up to 25%.
The investment is based on a valuation of £3.5 billion for ReAssure, which had been agreed between the two parties back in October 2017, adjusted for dividends and capital injections made into the closed life consolidator, as well as for the deal that saw ReAssure buying 1.1 million life policies from L&G.
Swiss Re said that the investment, “Demonstrates MS&AD’s appreciation of ReAssure’s strong franchise, built on the co-operation and mutual trust that has existed between MS&AD and Swiss Re for over 100 years on the back of their long- standing business relationship.”
Thierry Léger, CEO Swiss Re Life Capital, added, “As we continue to work towards the potential IPO of ReAssure in 2019, the increase of MS&AD’s stake to 25% is a strong vote of confidence from our minority shareholder and long-term partner. We are delighted to have them as investors alongside us and together we remain committed to supporting ReAssure in its strategy of leading the way in UK life and pensions consolidation.”
Swiss Re said that it continues to work towards the planned IPO for ReAssure, when it will be able to realise more of the investments it has made into the firm.
The reinsurance firm notes that the IPO would be subject to market conditions.