Swiss Re to Acquire Life Assurance Holding Corp.

In a move designed to increase its presence in the U.K.’s life and pension market, Swiss Re announced that it will acquire the shares of Life Assurance Holding Corporation Limited (LAHC), including its life insurance subsidiary Windsor Life Assurance Company Limited, for £333 million ($606 million) in cash.

Swiss Re said the “transaction will provide additional scale and infrastructure for Swiss Re’s Admin Re(sm) business in the United Kingdom.” It noted that the acquisition, which remains subject to regulatory approvals, “will be the second of Swiss Re’s Admin Re(sm) transactions in the UK after successfully concluding the acquisition of Zurich Life in 2003.”

The world’s largest life and health reinsurer also announced plans to float 640 million euros ($776 million) worth of convertible bonds (see following article).

The announcement noted that “Windsor Life administers more than 800, 000 policies with total assets of approximately £5.2 billion [$9.46 billion]. Part of the purchase price of £333 million will be held in escrow and released in accordance with the terms of sale.”

Admin Re(sm) specializes in the acquisition of books of life and health policies that have been, or will be, placed into run-off. John Fitzpatrick, Head of Swiss Re’s Life & Health Business Group commented: “Swiss Re’s competitive advantage of a strong capital base and proven experience with managing life business in run-off enables us to offer this solution to the UK’s consolidating primary marketplace. With our Admin Re (sm) offering, we continue to see growth opportunities to put our capital to work at attractive rates of return.”

Jonathan Meggs, Chairman of LAHC and Head of JPMorgan Partners in Europe stated: “I am delighted that LAHC will become part of the Swiss Re Group. LAHC has enjoyed considerable growth and success in its UK life run-off insurance strategy.” LAHC CEO Jonathan Yates added: “This transaction is positive news for LAHC, its employees and other stakeholders.”

The bulletin also indicated that “the administration under this agreement will be handled by Computer Sciences Corporation, which “provides administration services for the majority of Swiss Re’s Admin Re(sm)’s portfolio in the United States and is Swiss Re’s outsourcing provider in the United Kingdom.”