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Swiss Re halves Phoenix stake

Swiss Re halves Phoenix stake | Insurance Business

Swiss Re halves Phoenix stake

Swiss Re, which previously received shares in Phoenix Group Holdings Plc as part of the latter’s swoop for UK closed book consolidator ReAssure, has offloaded an approximately 6.6% stake in the British giant.     

In a release today, Swiss Re said it sold a portion of its Phoenix shareholding for £437 million. Expected to close on Friday, the divestment was carried out via an accelerated bookbuilding process.

“The sale was done in the context of a regular review and rebalancing of Swiss Re’s investment portfolio and is consistent with the group’s overall investment strategy across equity and alternative investments,” explained the Zurich-headquartered reinsurer.

“In connection with the sale, Phoenix gave its consent to Swiss Re to conduct this transaction prior to the expiry, on July 23, 2021, of the lock-up arrangement agreed between the parties.”

According to Swiss Re, the transaction is estimated to result in a low single-digit increase in its Swiss solvency test ratio. The impact on US GAAP (generally accepted accounting principles) earnings, meanwhile, is not expected to be significant.

The group added: “Swiss Re has agreed to a lock-up arrangement in respect of its remaining stake of approximately 6.6% in Phoenix of 90 days following closing, subject to waiver, as is customary for such a trade. The remaining stake will continue to be marked to market in US GAAP earnings.”