Bermuda-based reinsurance to investment company RenaissanceRe Holdings has agreed to pay about $1.5 billion to acquire Japanese insurance holding company Tokio Marine’s reinsurance platform (TMR), which includes Tokio Millennium Re AG and Tokio Millennium Re (UK).
If the closing tangible book value is unchanged, Tokio Marine would receive approximately $1.5 billion in cash and RenaissanceRe common shares.
Also, as part of the transaction, Tokio Marine has agreed to provide RenaissanceRe with a $500 million adverse development cover that will protect TMR’s stated reserves at closing, including unearned premium reserves.
In addition, Tokio Marine and RenaissanceRe will enter a business cooperation agreement, which will enhance the companies' business relationship and facilitate cooperation on a portion of the international reinsurance purchases of Tokio Marine and its affiliates.