Bermuda’s Catalina to acquire Asia Capital, put it into run off

Bermuda-based legacy re/insurer Catalina Holdings looks set to acquire Asia Capital Reinsurance Group (ACR), which would cease writing business with immediate effect if the deal goes ahead.

The acquisition of the Singapore-headquartered reinsurance business is expected to close in the first half of 2020, subject to regulatory and all other approvals.

As part of the transaction, 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 company said.

ACR had $835 million of shareholder equity, $1.3 billion of gross liabilities including Unearned Premium Reserve, and total assets of $2.1 billion as of September 30, 2019. Its reinsurance portfolio extends across a broad geographic scope and wide range of business lines including property, motor, marine, agriculture, engineering and aviation.

The business, which was founded in 2006, has offices across Asia, including in Singapore, Japan, South Korea, Malaysia and Hong Kong. Its existing major shareholders include 3i Group (and affiliates), Khazanah Nasional Berhad, Temasek Holdings (Private) and Marubeni Corporation.

Pro forma for the acquisition of ACR, Catalina will have total assets of $7.5 billion.

The acquisition will be Catalina’s first in Asia and marks a strategic move to increase its exposure to the significant run-off market across the continent. According to PwC’s 2019 Global Insurance Run-off Survey, Asian non-life run-off reserves are estimated at around $100 billion. Catalina intends to use ACR and Singapore as a hub to build a strong Asian run-off platform.