A Hamilton, Bermuda, life reinsurer could run into turbulence.[@@]
The reinsurer, Scottish Re Group Ltd., recently acquired one large life reinsurance business from a unit of ING Groep N.V., Amsterdam, and a second large life reinsurance business from Employers Reinsurance Corp., a subsidiary of General Electric Company, Fairfield, Conn.
A team of analysts at UBS Investment Research, New York, has reacted to the deals and other developments at Scottish Re by cutting its rating on the company’s stock to “reduce,” from “neutral,” and by lowering its target price for Scottish Re’s stock to $19, from $26.
Representatives for Scottish Re were not immediately available for comment.
The UBS team, led by Andrew Kligerman, has concerns about the prices of the deals and about the risks involved with acquiring aging books of business, according to a research note released today.