Hannover Re announced today that the acquisition of the ING individual life reinsurance business from the Scottish Re Group which was first announced at the end of January has been completed.
Hannover Re acquired the policy administration systems and operating assets required to administer North American life reinsurance business as well as investment assets to fund the technical liabilities associated with the portfolio.
The company has also secured the employment of key personnel. The acquisition thus marks a major step in the expansion and further diversification of Hannover Re's global life reinsurance business.
The contracts are expected to generate a premium volume in the order of $1.2 billion for 2009. Hannover Re anticipates an annual profit contribution of approximately 30 million over the coming years.
"This is a transformational step for our global life reinsurance ambitions," Hannover Re's CEO Wilhelm Zeller said. "It contributes a large block of business in force, together with industry-leading capabilities in mortality research, pricing, underwriting and reinsurance administration which will substantially increase our presence and earnings from the U.S. mortality risk market. It has the added benefit of improving our diversification of earnings sources, placing less reliance on the more volatile non-life sector going forward."
JPMorgan Securities acted as exclusive financial advisor to Hannover Re on this transaction and Locke Lord Bissell & Liddell and Debevoise & Plimpton provided external legal counsel.