(Bloomberg) -- AllianzSE, Europe’s biggest insurer, struck a deal to limit risks inthe U.S. by transferring policy obligations to reinsurer Enstar Group Ltd.
|Enstar will assume net reinsurance reserves of about $1.1billion and cover half of a book of business for Allianz, accordingto a statement Wednesday from the Bermuda-based company. The dealincludes obligations on policies from workers’ compensation,construction defects, and asbestos that were issued under theFireman’s Fund brand.
|Related: Allianz creates Cyber unit for U.S.market
|Allianz is focusing on its most profitable segments as it seeksannual earnings-per-share growth of 5% on average from 2016 to2018. The Munich-based company reached a deal in 2014 to sell theretail business of Fireman’s Fund to Ace Ltd. for $365 million.Allianz kept the commercial property-and-casualty businessesof Fireman’s Fund to restructure them or wind them down.
|Enstar traces its roots to the early 1990s and takes on businessfrom carriers that stopped selling lines of coverage. It counts theCanada Pension Plan Investment Board and Stephen Friedman’s StonePoint Capital as its largest shareholders.
|“Implementing a reinsurance transaction of this complexity andmagnitude for Allianz, a global industry leader, demonstratesclearly the scope and scale of the solutions that Enstar canprovide,” Chief Executive Officer Dominic Silvester said in thestatement. “We welcome the opportunity to continue to work withAllianz.”
|Under the deal, Enstar will provide consulting services on theentire $2.2 billion portfolio, including the share retained byAllianz. The combined support by Enstar will initially be capped at$270 million.
|Related: Allianz aims to add $6.9 billion in premiums, focuson top units
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|Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
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