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Swiss RE denies plans to sell shares to CPIC
Posted on Thursday, 07 November 2019 14:51
Swiss RE has released a statement after Bloomberg reported a possible billion-dollar-plus equity tie-up with China Pacific Insurance (CPIC). In the announcement, the Zürich-headquartered reinsurance giant confirmed the two have been “exploring a potential investment opportunity” in a primary offering of securities by the Shanghai- and Hong Kong-listed risk protection provider. However, it cautioned “no definitive agreement has been entered into” and, separately, it has “no current intention of issuing new shares or making treasury shares available” to any subscriber. Bloomberg earlier reported CPIC is in advanced discussions to acquire a USD 2.00 billion-stake in Swiss Re, which, in return, would buy an equity interest in the Asian rival for USD 500.00 million to USD 1.00 billion. The news provider noted the potential investments would be beneficial to both parties with regards to expanding outside their own borders. CPIC is keen to establish overseas partnerships while its would-be equity shareholder wants to extent its Asian footprint to capture the increasing demand for insurance from the middle class, it added. Founded in 1863, Swiss Re is one of the world’s largest providers of risk-based protection products and operates through a network of about 80 offices globally. in the first nine months of 2019 the group’s net profit rose 23.0 per cent to USD 1.30 billion from USD 1.10 billion in Q1-3 2018. Net premiums earned and fee income were up by 10.0 per cent over the same timeframe at USD 28.44 billion (Q1-3 2018: USD 25.80 billion), driven in particular by growth in property and casualty reinsurance premiums. Return on equity was 6.0 per cent (Q1-3 2018: 4.7 per cent) and its capital position remained very strong, with a group Swiss solvency test ratio of 241.0 per cent. Zephyr, the M&A database published by Bureau van Dijk, shows 16 deals targeting the global insurance sector worth more than USD 1.00 billion have been announced so far this year. The largest features HCC Insurance acquiring Privilege Underwriters for USD 3.10 billion. © Zephus Ltd