RenaissanceRe has secured all the necessary regulatory approvals for its $1.5bn acquisition of TMR, the reinsurance platform of Tokio Marine.
In October 2018, the Bermuda-based RenaissanceRe entered into a cash-cum-stock deal with the Japanese insurance company to acquire TMR, which is the combined name for Tokio Millennium Re and Tokio Millennium Re (UK).
The transaction is expected to be closed as soon as possible, subject to the satisfaction of customary closing conditions.
TMR, which is currently owned by Tokio Marine’s subsidiary Tokio Marine & Nichido Fire Insurance, was founded in 2000 to write overseas reinsurance risks.
Last year, TMR and the TMR (UK) unit expanded the classes of business written into non-catastrophe exposed classes of business.
At the time of signing the deal, Tokio Marine said that the sale of the reinsurance platform will allow it to focus on its core insurance businesses across the world while strengthening its relationship with RenaissanceRe.
In this connection, the Japanese insurance company offered a $500m adverse development cover to the Bermudian firm for protecting the stated reserves of TMR at the time of the deal closing, including unearned premium reserves.
Another factor cited by Tokio Marine for the sale of TMR is the several changes faced by the global reinsurance market. Included in these is the continuing soft market environment caused by steady inflow of capital from outside the reinsurance industry, which has been affecting the return earned from the business, said the Japanese firm.
In addition to the TMR transaction, Tokio Marine and RenaissanceRe also agreed to sign a business cooperation agreement, which is expected to boost their business relationship and facilitate cooperation on a part of the global reinsurance purchases made by Tokio Marine and its affiliates.
RenaissanceRe agreed to acquire TMR in a move to improve its scale, widen its reach and extend the company’s ability to apply its core strengths to a deeper customer base.
Founded in 1993, the company offers property, casualty and specialty reinsurance and certain insurance solutions to customers, mainly through intermediaries.