Huge acquisitions are the target of some major reinsurance firms, including an industry giant that is setting its sights on potential deals in the UK and Europe.
Swiss Re, through its specialist unit Admin Re, is currently in talks with several sellers of close life books,
Reuters reported.
David Cole, Swiss Re’s chief financial officer, said that some of the companies in discussions with the reinsurer are “significant” in size.
As an example of how big the deals could be, Cole cited Admin Re’s acquisition of Guardian Financial Services in 2015 worth £1.6 billion.
Cole said Admin Re is focusing on deals in the UK but the business is also open to transactions elsewhere in Europe.
“There is an interesting pipeline of opportunities, we do see interesting discussions we are having with potential vendors,” Cole told
Reuters during the reinsurance industry’s annual meeting in Monte Carlo.
Meanwhile, reinsurer Axis Capital aims to grow its business through major transactions comparable to its failed takeover of PartnerRe.
Axis CEO Albert Benchimol told
Bloomberg that the company could “do anything in the $3 billion to $5 billion range.”
“PartnerRe showed that we could, under the right circumstances, pursue a $5 billion company,” the news agency quoted him as saying.
Benchimol said Axis may also acquire smaller businesses and companies not solely focused on reinsurance.
“PartnerRe was an example of a possible acquisition that might have worked, there are others,” Benchimol told
Bloomberg.
“They may not be pure reinsurance companies and they may not be the size of PartnerRe, but there are certainly interesting companies out there,” he added. “Whether they want to be acquired is another question.”
As for major player Hannover Re, CEO Ulrich Wallin said the company is not currently in talks for possible deals, but he believes that “there will certainly be more M&A in the reinsurance market.”
“We expect fairly large deals to happen in the future because as margins contract, you are going to see transactions that improve scale,” Paul Schultz, investment banking head at reinsurance broker
Aon Benfield also told
Bloomberg.
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