ZURICH (Reuters) – Swiss Re is considering going ahead with a flotation of its ReAssure subsidiary on the London Stock Exchange, the world’s second largest reinsurer said on Friday.
Swiss Re plans to publish its registration document on Friday, pending the approval of the UK Financial Conduct Authority. Under the flotation plans Swiss Re would cut its stake in ReAssure to below 50% from 75% at present.
“Publication of the registration document is the first step toward the potential listing of ReAssure ordinary shares on the main market of the London Stock Exchange,” Zurich-based Swiss Re said in a statement.
Swiss Re said in August 2018 it was examining a possible float of ReAssure, its British closed book business. The reinsurer said that it was important for ReAssure to have access to new capital to acquire additional closed books of policies no longer being actively sold.
Such deals have been increasing as insurers struggle to pay guaranteed returns for life insurance policies due to record-low interest rates and more stringent European capital rules.
At the time of the initial announcement, ReAssure had about 45 billion pounds in assets under management and 3.3 million policies, and analysts said it could achieve a market capitalisation of about $3 billion, or roughly half its book value, which was $6.2 billion in 2017.
SwissRe said it and fellow shareholder MS&AD, which holds 25% in Reassure, would inject 481 million pounds in new capital into ReAssure ahead of the planned IPO.
(Reporting by John Revill, editing by Riham Alkousaa)