2009-07-08

By Editor, CIR

The acquisition of Paris Re by Bermuda-based Partner Re in a $2 billion deal is expected to create the world's fourth-largest reinsurer ranked by common equity,

Switzerland-based Paris Re was formerly the reinsurance business of Axa Re, but was spun off in 2006. According to ratings agency Fitch the group has "yet to demonstrate the same strong track record of profitability as PartnerRe".

Fitch says it expects to revise its ratings outlook for PartnerRe from 'negative' to 'stable' on completion of the acquisition, which is scheduled for the fourth quarter of 2008.

PartnerRe is a multi-line reinsurer, including property and casualty, catastrophe, speciality lines and life. Its gross premiums were $4 billion in 2008, against $1.4 billion for those of Paris Re. The deal will enable PartnerRe to diversify geographically as Paris Re has a major book of emerging markets business.

"The greater market presence, risk diversification, capital strength and scale that is created will provide more balance and stability to our company in the face of uncertain and volatile financial and reinsurance markets," commented Patrick Thiele, PartnerRe's president and chief executive.

Albert Benchimol, the group's chief financial officer added: ''What the whole world has learned in the last year is that we need to be prepared for extreme circumstances.

"In a higher risk environment, risk assuming entities must reduce overall risk and this is achieved with increased capital and a more diversified business portfolio."

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