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LONDON (Alliance News) - UK life insurance consolidator ReAssure Group PLC said Friday it is planning to float on the London Main Market.
The IPO will consist of insurance giant Swiss Re AG selling its shares in the company.
Swiss Re announced in August 2018 it was exploring a possible initial public offering of its ReAssure business. If the IPO goes ahead, Swiss Re will take its holding in the business to below 50% from 75% currently.
ReAssure has 4.3 million policies in the UK with GBP68.7 billion in assets under management.
According to the company, it is the sixth largest life insurance group in the UK.
ReAssure acquires and manages closed-book life insurance policies; it does not write new business.
ReAssure said it is "well positioned" to benefit from the "significant" closed-book market opportunities in the UK and Europe. Since 2012, the company has completed four acquisitions, seeing a 2.6 million increase of policies and GBP44.9 billion of assets across life and pension insurance.
"Today's announcement marks a milestone in our corporate development. ReAssure is a scale player with a proven track record. We have developed a valuable franchise with the potential for significant future growth in the UK closed book markets. Our focused business model and highly-experienced management team put us in a powerful position to deliver attractive returns," said Chair Archie Kane.
ReAssure has a five-year cumulative surplus generation target from 2019 to 2023 of GBP2.1 billion and a target of GBP4.1 billion from 2024 onwards. The company expects to pay a dividend of GBP265 million per annum.
Chief Executive Mark Hodges added: "ReAssure has been highly successful, as part of one of the world's largest reinsurance companies. Today I am delighted we are taking the next and natural step for this business, exploring a potential IPO. We believe this will underpin attractive returns to shareholders. We see growth opportunities through further consolidation of closed life and pension books in the UK. A potential IPO would provide us with additional flexibility to take advantage of the opportunities we see."
ReAssure has appointed Credit Suisse International to act as sole sponsor of the IPO. Morgan Stanley and UBS will act as joint global co-ordinators and joint bookrunners. The company has also hired BNP Paribas and HSBC as joint bookrunners.
The company didn't provide a planned date for the IPO.