Swiss Re has confirmed that its UK subsidiary ReAssure Group is preparing to launch a $4.5bn initial public offering (IPO) to collect the required funds for expansion.
ReAssure, which is one of the sixth largest life insurers in the UK, intends to list at least a 25% stake that will effectively reduce Swiss Re’s stake to 50%.
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Swiss Re has reorganised ReAssure into a standalone group in preparation of the planned IPO. Swiss Re and MS&AD will both allocate £481m ($611m) in capital into ReAssure ahead of the IPO.
Pending receipt of approvals from the UK Financial Conduct Authority (FCA), the shares will be listed on the London Stock Exchange (LSE).
In August last year, the Swiss insurer said that it is considering a possible IPO of ReAssure, which exclusively focuses on the acquisition and management of closed books of life insurance policies. ReAssure has $87.3bn of assets under administration.
Following the IPO, Japan-based MS&AD Insurance Group will retain its existing shareholding of 25% in the UK life insurance business.
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By GlobalDataReAssure CEO Mark Hodges told Reuters that the deal would “allow ReAssure to pursue growth going forward, knowing that we have two anchor shareholders”.
Further, the listing on LSE will enable ReAssure to operate under the European Union’s Solvency II regime.
Morgan Stanley, Credit Suisse and UBS will act as the joint global coordinators. BNP Paribas and HSBC will serve as the joint bookrunners for the IPO.
