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- SCOR and AEGON have entered into a definitive agreement pursuant to which SCOR will acquire the mortality risk reinsurance business of Transamerica Re, a part of AEGON. The business to be acquired relates solely to biometric risks.
- Transamerica Re is part of AEGON, but not as a legal entity. Therefore, the acquisition includes a series of retrocession agreements from AEGON to SCOR Global Life US entities. As part of the acquisition, SCOR will also purchase from AEGON one Irish legal entity, which underwrites Transamerica Re business.
- AEGON will transfer to SCOR EUR 1.2 billion (USD 1.8 billion) of liabilities and corresponding assets in cash and/or securities in line with SCOR’s investment policy.
- The total consideration for the acquired business amounts to approximately[1] EUR 630 million (USD 912.5 million). It includes an estimated statutory capital of around1 EUR 340 million (USD 497 million) for the Irish entity.
- The transaction will be financed by SCOR through the use of own funds and a potential limited debt issuance, without the issuance of any new shares.
- The transaction is fully in line with the “Strong Momentum” profitability and solvency targets, and is not expected to impact the Group’s rating.
- This acquisition will significantly enlarge the global footprint of SCOR’s Life reinsurance business. SCOR will benefit from Transamerica Re’s leading market position in the US, with its strong biometrics focus and very limited franchise overlap.
- Thanks to this transaction, SCOR will rank number two in the US Life reinsurance market, while strengthening its positions in Asia and Latin America.
Overview of the business to be acquired:
- Transamerica Re is the 3rd largest[2] Life reinsurer in the US based on 2009 recurring new business volume, and the 7th largest[3] in the world based on 2010 net earned premiums. It is active in the Life mortality markets.
- Transamerica Re’s gross written premiums amount to USD 2.2 billion in 2010, with 87% generated in the US. It is headquartered in Charlotte, North Carolina and operates in 11 countries with 451 employees.
Denis Kessler, Chairman & Chief Executive Officer of SCOR SE, comments: “The acquisition of Transamerica Re’smortality portfolio will mark a new milestone in the history of SCOR. This transaction relates only to biometric risks, and is fully consistent with SCOR’s strategy and risk appetite. The rebalancing of the Life reinsurance book between the United States, Asia and Europe, while enlarging the Group’s footprint and significantly expanding our global franchise, will also provide additional stability to the Group.
This transaction will be financed through own funds and a potential limited debt issuance, without the issuance of new shares. It satisfies the Group’s profitability criteria and is expected to create value for SCOR’s shareholders.
This transaction paves the way towards a fruitful and long-lasting partnership with AEGON over the next fifteen years.”
1 On the basis of a EUR/USD exchange rate as of 21 April 2011 of 1.458
2 Source: 2009 Munich American SOA Survey
3 Source: Company reports
