French Insurer SCOR Acquires Allstate's Reinsurance Business
April 04, 2011
French insurer SCOR agreed to acquire Allstate Corp.'s reinsurance business. Terms of the deal weren't disclosed. But when Allstate said it would put the reinsurance unit on the market along with another unit, analysts estimated that the two divisions could fetch more than $1 billion. In June, the other unit, Northbrook Holdings, was sold for $180 million. Moseley Mccrae, managing director of Paris-based SCOR, which is 40%-owned by France's largest insurance group, Union des Assurances de Paris, said the final purchase price is subject to some minor revisions. Terms of the deal weren't disclosed. Allstate, which insures one of every eight homes and automobiles in the country, is also one of the nation's 35 biggest sellers of policies to small- and medium-size businesses. But analysts said the commercial operations haven't performed as well as the company's core businesses, prompting the company's decision to shed the units. Allstate's reinsurance portfolio will double the size of SCOR's U.S. unit, making it one of the 10 largest reinsurance companies in the United States, SCOR said. The acquired business will roughly double SCOR's share of the U.S. market to between 2.5% and 2.8%, Mr. Mccrae said. The acquisition, which is subject to U.S. regulatory approval, also will boost the North American portion of the French group's premium income to about 35% from 22%, SCOR said. Allstate will handle the liquidation of contracts signed before 1985, the company said. Allstate, formerly a unit of retail chain Sears Roebuck & Co., has been selling off its commercial insurance business and focusing on personal products, such as life and home insurance. In late March, Sears shareholders approved the spinoff of its 80% ownership, valued at more than $10 billion, of Allstate to Sears common shareholders as a tax-free dividend. In composite trading on the New York Stock Exchange, Allstate's shares fell 25 cents to $42.375.
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