With the deal, Catalina aims to use Asia Capital Reinsurance and Singapore as a hub to build strong run-off platform in Asia
Catalina, a Bermuda-based acquirer of insurance and reinsurance companies, has agreed to acquire Singapore-based reinsurance business Asia Capital Reinsurance Group (ACR) for an undisclosed amount.
As part of the deal, ACR will cease writing business with immediate effect and all existing policies in force will be serviced until expiry.
It will continue to honour all valid reinsurance quotes issued to date, along with liabilities from outstanding commitments to its business partners.
Founded in 2006, ACR has offices in Singapore, Japan, South Korea, Malaysia and Hong Kong. Its major shareholders include 3i Group, Khazanah Nasional Berhad, Temasek and Marubeni.
The firm’s reinsurance portfolio includes a broad geographic scope and covers a wide range of business lines including property, motor, marine, agriculture, engineering and aviation.
As of 30 September 2019, ACR had $835m in shareholder equity, $1.3bn in gross liabilities including unearned premium reserve and total assets of $2.1bn.
The deal will bring Catalina’s total assets to $7.5bn
The deal is expected to be closed in the first half of next year, subject to regulatory and all other approvals. After it is closed, Catalina claims that it will have total assets of $7.5bn.
Catalina Holdings CEO Chris Fagan said: “This is a strategically important transaction for Catalina, as it gives us a platform from which to build an Asian portfolio and to complete our geographic footprint. There are significant opportunities for further acquisitions in Asia, in what is a developing and growing run off market.”
ACR chairman Hsieh Fu Hua said: “This was a shareholder-led process, which has culminated in a successful exit. Catalina, as the buyer, has the experience and expertise to deliver on ACR’s outstanding commitments to clients and take the business into a new direction.
“On behalf of the Board, I would also like to formally express my appreciation to ACR’s business partners, management, staff and all other stakeholders for their support over the last 13 years.”
The company plans to use ACR and Singapore as a hub to build a strong run-off platform in the region.
On the transaction, King & Spalding is serving as legal advisor to Catalina, while Credit Suisse is acting as financial advisor and Allen & Overy is acting as legal advisor to ACR and its majority stakeholders.
In December 2018, Catalina had agreed to acquire the majority of Zurich’s UK employers’ liability (UK EL) policies for 2006 and prior underwriting years from Zurich Insurance.