Catalina buying Temasek-backed Asia Capital Reinsurance to build regional portfolio

LEGACY insurance and reinsurance player Catalina Holdings has reached an in-principle agreement to buy the entire stake in Singapore-headquartered Asia Capital Reinsurance Group (ACR), an ACR spokesman told The Business Times.

The deal is expected to close in the first half of 2020, subject to approvals, according to a press statement on Thursday.

ACR's existing major shareholders include Singapore state investment firm Temasek Holdings, London-based private equity firm 3i Group, Malaysia's sovereign wealth fund Khazanah Nasional Berhad and Japanese conglomerate Marubeni Corporation.

Hsieh Fu Hua, chairman of ACR said: "This was a shareholder-led process, which has culminated in a successful exit. Catalina has the experience and expertise to deliver on ACR's outstanding commitments to clients and take the business into a new direction."

The acquisition will be Catalina's first in Asia. It intends to use ACR and Singapore as a hub to build a strong Asian run-off platform.

The deal amount was not disclosed, but as at Sept 30, 2019, ACR had US$835 million of shareholder equity, US$1.3 billion of gross liabilities including unearned premium reserve, and total assets of US$2.1 billion.

Chris Fagan, chief executive of Catalina, said: "This is a strategically important transaction for Catalina, as it gives us a platform from which to build an Asian portfolio and to complete our geographic footprint."

As part of the deal, ACR will cease writing business with immediate effect and all existing policies in force will be serviced until expiry. ACR will continue to honour all valid reinsurance quotes issued to date, as well as liabilities from outstanding commitments to business partners.

The Bermuda-based Catalina acquires and manages companies in the non-life insurance/reinsurance run-off sector. According to PwC's 2019 Global Insurance Run-off Survey, Asian non-life run-off reserves are estimated at around US$100 billion.