NU Online News Service, Oct. 24, 2003, 12:22 p.m. EDT – Scottish Re Group Ltd., Hamilton, Bermuda, has agreed to acquire 95% of the outstanding capital stock of ERC Life Reinsurance Corp., a subsidiary of Employers Reinsurance Corp., Overland Park, Kan., for $151 million in cash.
Employers Re is a unit of General Electric Company, Fairfield, Conn.
Scottish Re, a reinsurer founded in 1998, has $105 billion of mortality-based reinsurance business in force.
ERC Life has about $800 million in assets, $100 million in statutory capital and surplus, and $170 billion of in-force business. Most of the ERC Life business consists of a closed block of traditional life reinsurance business written before the new term life reserve requirements took effect, Scottish Re says.
Scottish Re does not expect to hire any Employers Re employees as a result of the acquisition, Scottish Re says.
Analysts at Standard & Poor’s Ratings Services, New York, say the acquisition ought to be a good deal for Scottish Re.
“The acquisition is consistent with the group’s strategy and provides a good use of excess capital,” the S&P analysts write in a commentary on the deal.
The deal will help Scottish Re spread risk by increasing the company’s policy count to 7 million, from 2 million, the analysts add.