Hannover Re said that it has concluded a $500m long-term letter of credit facility with Deutsche Bank, to make further growth opportunities in the US reinsurance market and it will also be used by the company solely to expand its life business.
The company said that the line of credit can be used to put up the collateral required by regulators for assumed technical liabilities. It has the option to further increase the size of the facility above and beyond the initial $500m to support additional business.
Through the acquisition of the ING life reinsurance portfolio in 2009 Hannover Re has also acquired a policy administration platform and a team of mortality risk experts.
The facility has a maturity of thirty years, with an early termination option exercisable by Hannover Re at specified times. The pricing is fixed through the first optional redemption date, Hannover Re said.
Ulrich Wallin, CEO of Hannover Re, said: “Having a perfect team combined with these new financial resources gives us a sound basis for leveraging the opportunities that will open up going forward. We are striving to expand our business in the life market.”