Fairfax Financial Holdings Limited announced that its French subsidiary, Compagnie Transcontinentale de Reassurance Holding (CTRH), Has completed the purchase of Compagnie de Reassurance d’Ile-de-France (Corifrance), a French reinsurance subsidiary of Markel Corporation which was placed into runoff in November, 2004, and its French holding company Terra Nova SAS.
“Corifrance and TN SAS had consolidated total assets of 137 million euros ($180 million) on a pro forma US GAAP basis as at September 30, 2004, “said the announcement. “Before being placed into runoff by Markel, Corifrance wrote a small diversified mix of reinsurance business on a worldwide basis, including property, aviation, marine and credit. Corifrance had net written premiums, on a pro forma US GAAP basis, of 21 million euros ($27.7 million) in 2003.”
Fairfax said it paid 44 million euros ($58 million) for the company, “which was determined on the basis of a discount to book value. As part of the consideration for the purchase, CTRH received a reserve indemnity capped at the purchase price. As at September 30, 2004, Corifrance had gross claims reserves of 38 million euros ($50 million).
“Payment is scheduled to occur upon the earlier of the dissolution and merger of Corifrance into an affiliate of CTRH or April 7, 2005. Subject to regulatory approvals, Fairfax intends to merge Corifrance into its European runoff subsidiary, Riverstone Insurance UK.”
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