Phoenix buys Swiss Re’s ReAssure

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In the UK insurer’s biggest deal to date, Phoenix Group is buying the UK ReAssure business of Swiss Re for £3.2bn (US$4.1bn) in cash and shares.

The deal comes after ReAssure, which like Phoenix specialises in closed life insurance books, abandoned a planned initial public offering (IPO) earlier this year.

By consolidating the closed books of business, Phoenix aims to run them more efficiently.

Outgoing Phoenix chief executive Clive Bannister says: “There are too many insurance companies in a market which is consolidating and we are the natural beneficiaries.”

Phoenix says that the deal would also enable it to grow in bulk annuity deals – insuring company defined benefit, or final salary pension schemes.

The deal will take Phoenix’s total assets to £329bn and is expected to generate £800m of cost and capital synergies.

Swiss Re, the world’s second largest reinsurer, estimates the transaction, expected to close in mid-2020, will have a positive impact on its Group Swiss Solvency Test (SST) ratio and economic profit and a negative impact on its US GAAP results in the fourth quarter of 2019.

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