HDI Global, Hannover Re Merge Units to Create Specialty Insurance Joint Venture

May 14, 2018

Hannover Re and HDI Global SE are merging their specialty activities in a new joint venture. The new company, HDI Global Specialty SE, will write agency and specialty insurance business in lines such as errors & omissions liability insurance, directors’ and officers’ (D&O) liability insurance, legal expenses insurance, sports and entertainment, aviation, offshore energy and animal insurance.

The first step towards establishing the joint venture HDI Global Specialty will entail HDI Global SE acquiring the majority of the shares in International Insurance Company of Hannover SE (Inter Hannover), a subsidiary company of Hannover Re. The purchase price to be paid for the shareholding is around EUR 100 million.

After the transaction has taken place, Inter Hannover will be renamed HDI Global Specialty SE. HDI Global SE will contribute its specialty portfolio to the new company.

HDI Global SE will hold 50.2 percent of the new company and Hannover Re will have 49.8 percent of the shares.

HDI Global Specialty is being launched with a premium volume of more than EUR 1 billion. The parties said they will strive to achieve substantial organic growth.

Pending approval by the supervisory authorities, the joint venture will roll out joint operational activities on January 1, 2019.

Dr. Christian Hinsch, chairman of HDI Global SE, said the speciality business has attractive above-average margins and is growing faster every year than classic industrial business.”The bundled know-how of the new joint venture will help us to expand our position in the specialty market,” he said.

Ulrich Wallin, chairman of the board of Hannover Re, said the move will result in a strengthening of its core business and a reinsuring of the portfolio in a way that enables it to derive even more benefit from the growth opportunities available in specialty business. “We can then make use of the capital that becomes available as a result to grow the business further,” he said.

“This step strengthens our roots as an industrial insurer,” Torsten Leue, chairman of the board of Talanx AG, parent company of HDI, adding that tthe new entity will focus on “particularly profitable and high-growth market segments.”

Talanx is one of the major European insurance groups. Under the HDI brand, Talanx operates both in Germany and abroad in industrial insurance as well as retail business. HDI’s more than 3,000 employees generated gross written premiums of approx. EUR 4.5 billion in the year 2017.

Hannover Re, with gross premium of EUR 17.8 billion, is the third-largest reinsurer. The Group’s German business is written by the subsidiary E+S Rück.

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