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Daily Insurance Industry News
Thursday 18th of October 2018
December 22, 2010

Hannover Re sells US subsidiary to Enstar

by Gill Montia

Story link: Hannover Re sells US subsidiary to Enstar

Hannover Re has agreed the sale of its US subsidiary, Clarendon Insurance Group, Inc., to the Bermuda-based Enstar Group.

According to the parent, the sale (for around $200 million) will free up cash and reduce the level of the group’s reinsurance recoverables.

At the same time, Enstar, which specialises in the run-off of insurance and reinsurance companies, will have the opportunity to run the Clarendon portfolio off profitably, through economies of scale.

Commenting on the deal, Hannover Re’s chief executive officer, Ulrich Wallin, explains: “With the sale of Clarendon we are parting with a subsidiary that has been in run-off since 2005 and thereby freeing up resources that can be used to further grow our core business”.

However, Mr Wallin warns that the sale will cause a “strain” on the result in the current year, although the company should be able to offset this from the profit on ordinary activities.

In terms of group net income, Hannover Re expects to report post-tax profit of over €700 million for 2010.

 

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