AEGON has transferred to SCOR $1.8 billion of assets in cash and securities, and corresponding liabilities (numbers subject to customary closing adjustments). The asset portfolio transferred is made up of cash (55 percent), investment grade corporate bonds (40 percent) selected individually by SCOR’s teams, with an average rating of A-, and U.S. Treasuries (less than 5 percent). The portfolio has no exposure at all to U.S. agency or municipal bonds.
The acquisition amounts to a total consideration of $912.5 million, including a statutory equity of $497 million for the Irish entity per closing date, according to SCOR.
For AEGON, the decision to divest Transamerica Re is consistent with its strategic focus on its core business of life insurance, pensions and asset management, while improving its risk-return profile.
For SCOR, this transaction meets its objectives in terms of both profitability and solvency, as set out in its strategic plan for the period 2010-2013. The acquisition increases the volume of premiums written by SCOR Global Life by around 50 percent, as Transamerica Re represented a gross premium volume of $2.2 billion in 2010, 87 percent of which was underwritten in the United States, SCOR said.
The Transamerica Re management team, along with its officers and employees, will join SCOR. The activities of SCOR Global Life and Transamerica Re on the American continent have been combined into a single new SCOR Global Life entity, SCOR Global Life Americas, managed by Paul Rutledge, who until now was the President of Transamerica Re. Paul Rutledge also joins SCOR’s executive committee.
