RenaissanceRe gets regulator approval for Platinum acquisition

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Bermudian reinsurance and third-party reinsurance capital management firm RenaissanceRe has now received all the necessary regulatory approvals for its acquisition of Platinum Underwriters Holdings Ltd.

The transaction now needs to be voted positively on by the shareholders of Platinum at the firm’s previously announced shareholder meeting scheduled for February 27th 2015.

If a positive vote is received then both parties expect the transaction to close on the morning of Monday, March 2nd 2015.

The end result, if all goes ahead as expected, will be a larger RenaissanceRe with a broader book of U.S. specialty and casualty reinsurance business, an expanded product offering and broader broker relationships.

The acquisition could bring additional opportunities to third-party investors in RenaissanceRe’s jont ventures and insurance-linked funds, with Platinum also having a property catastrophe book, some of which RenRe may elect to share with third-party capital in order to keep its book balanced.

The question remains whether the diversification and greater scale that Platinum brings to RenRe is enough on its own to make the difference to help the firm through the softened reinsurance market environment. Time will tell as these M&A deals in the market are fully integrated whether it is truly enough to maintain relevance, however in RenRe’s case its strong underwriting, ability to leverage lower-cost capital and increasing diversification puts it in a good position to make the deal work.

Also read: Can M&A help reinsurance capital to be as low-cost & efficient as ILS?

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