Bermuda-based PartnerRe Ltd. announced a definitive agreement to acquire California-based Presidio Reinsurance Group, a U.S. specialty accident and health reinsurance and insurance writer.
PartnerRe said it would “purchase the Presidio Reinsurance Group, comprised principally of a Managing General Agency (MGA) and a reinsurance carrier. Under the terms of the agreement, PartnerRe will pay $72 million as consideration for the MGA, plus tangible book value as consideration for the Presidio reinsurance carrier, with such book value to be determined at the time of the closing. Additional consideration may be paid if the acquired business exceeds certain profitability targets over time.”
The announcement also noted that the “Presidio Reinsurance Group currently underwrites approximately $250 million of accident and health premiums.” It was formed in 1994 and writes primarily HMO reinsurance and stop-loss insurance in the US. Additionally, it writes medical treaty reinsurance, employer stop-loss insurance, and accident insurance and reinsurance.
PartnerRe said “the current management team of the Presidio Reinsurance Group will be retained, including its founder and CEO, Dennis Heinzig.”
PartnerRe President and CEO Costas Miranthis commented: “We are very pleased to announce the addition of this excellent franchise and management team to our organization. Presidio is a leader in U.S. specialty accident and health insurance and reinsurance, with an excellent 18-year track record of underwriting profitability. We see significant opportunity in this market and with Presidio’s experienced team and strong market position, we will be well-positioned to take advantage of future growth opportunities.”
Miranthis also indicated that the “acquisition is consistent with PartnerRe’s long-standing diversified strategy and provides us with another specialty risk class, which we do not currently access. The Presidio Accident & Health business complements our portfolio well and has limited correlation with our existing book of risks. As we continue to operate under somewhat challenging market conditions, we expect this new risk class will add consistent risk-adjusted profitability to the overall portfolio.”
The acquisition is subject to customary regulatory approvals and is expected to be completed during the first quarter of 2013.
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