ACR Goes Into Run Off After Acquisition

Legacy and run off specialist Catalina Holdings (Catalina),has announced it is to acquire Asian reinsurer Asia Capital Reinsurance Group (ACR).

The move will see Catalina expanding into Asia and has been described by the firm’s CEO as the first of many in Asia. It will also see ACR placed into run-off.

Chris Fagan, Chief Executive, Catalina Holdings (pic) said: “This is a strategically important transaction for Catalina, as it gives us a platform from which to build an Asian portfolio and to complete our geographic footprint. There are significant opportunities for further acquisitions in Asia, in what is a developing and growing run off market.”

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.

ACR had US$835 million of shareholder equity, $1.3 billion of gross liabilities including Unearned Premium Reserve, and total assets of $2.1 billion as of 30 September 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 located across Asia, including Singapore, Japan, South Korea, Malaysia and Hong Kong. Its existing major shareholders include 3i Group plc (and affiliates), Khazanah Nasional Berhad, Temasek Holdings (Private) Limited and Marubeni Corporation.

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

The deal 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 US$100 billion. Catalina intends to use ACR and Singapore as a hub to build a strong Asian run-off platform.

Mr Hsieh Fu Hua, Chairman of ACR added: “This was a shareholder-led process, which has culminated in a successful exit. Catalina, as the buyer, has the experience and expertise to deliver on ACR’s outstanding commitments to clients and take the business into a new direction. On behalf of the Board, I would also like to formally express my appreciation to ACR’s business partners, management, staff and all other stakeholders for their support over the last 13 years.”

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