Peak Reinsurance Co. Ltd., a Hong Kong-based global reinsurer, announced it has reached a definitive agreement to acquire the remaining 50% issued share capital of the Caribbean insurance group NAGICO Holdings Ltd.
Financial terms of the deal were not disclosed.
Upon the completion of the transaction, NAGICO will become a wholly owned subsidiary of Peak Re. The transaction is subject to regulatory approvals and other customary closing conditions.
Peak Re said the transaction is a natural next step following the company’s initial investment in NAGICO in 2016, in line with its strategy to diversify its portfolio globally. NAGICO will benefit from Peak Re’s expertise and its strong balance sheet, to further strengthen its capabilities and offerings to customers.
“NAGICO is a leading composite insurer operating in the Caribbean region,” said Franz-Josef Hahn, CEO of Peak Re. “It provides a broad range of personal and business insurance solutions. The acquisition of the remaining 50% stake in NAGICO will enhance Peak Re’s geographical and portfolio diversification.”
As a result of the proposed deal, AM Besthas placed under review with positive implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of the two operating subsidiaries of NAGICO Holdings Ltd. These are: National General Insurance Corp. in St. Maarten, and NAGICO Insurance Co. Ltd. in Anguilla, collectively referred to as NAGICO.
This rating action follows the announcement on July 27, 2021 that the group has entered into a definitive agreement whereby Peak Re will acquire the remaining 50% of NAGICO’s outstanding shares.
The positive implications status reflects AM Best’s expectation that NAGICO will benefit from the financial strength of Peak Re as it integrates into the group. The transaction is targeted to close prior to the end of 2021.
The ratings will remain under review until the transaction closes, all customary regulatory approvals are received and AM Best evaluates Nagico’s role in the Peak Re organization.
Since the initial investment by Peak Re in August 2016, NAGICO said it has pursued growth opportunities and has expanded its life operations and footprint into the Eastern Caribbean region. On the general insurance side, NAGICO said “it has continued to prove itself as a strong, reliable and trusted group having paid nearly $1 billion in claims following three CAT-5 Hurricanes: Irma, Maria and Dorian which devastated the region.”
“The outlook for NAGICO Insurances is positive,” said Kyria Ali, Interim CEO and Chief Strategy & Development Officer, in a statement.
“This transaction, when concluded, would result in the group being a wholly owned subsidiary of an AM Best A- and Moody’s A3 rated global reinsurer with approximately $1.5 billion in equity, thereby further strengthening our profile and broadening our reach,” Ali continued. “In addition, our mutual desire to harness the power of technology and deliver exceptional service augurs well for our clients in the near term.”
Source: Peak Re, NAGICO and AM Best
Topics Mergers & Acquisitions
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