Rothesay Life plans UK bid for Swiss Re

INSURER ROTHESAY Life is planning a £3.5bn bid for a unit of reinsurance company Swiss Re, it was reported yesterday, putting into question the Zurich-based company’s plans to list the British unit in 2019.

Rothesay had approached Swiss Re some weeks ago to buy ReAssure, Swiss Re’s British closed books division, and would make a formal offer in the coming months, Sky News reported, citing sources. Both Rothesay and Swiss Re declined to comment.

The news comes less than a month after Swiss Re, the world’s second-largest reinsurer, named a chief executive officer for its ReAssure amid plans for an initial public offering of the British unit.

Swiss Re announced the IPO plans in August last year, saying it was important for the unit to have access to new capital to buy more closed books.

Rothesay, which has been actively bulking up its portfolio, last year bought a £12bn UK annuities book from insurance giant Prudential and an £860m portfolio of equity release loans from UK Asset Resolution.

Such deals are attractive as ever with insurers struggling to pay guaranteed returns for life insurance policies due to recordlow interest rates and more stringent European capital rules.

Analysts have pegged that ReAssure could achieve a market capitalisation of about $3bn, or roughly half its book value.