The deal between PartnerRe and Axis

The deal between PartnerRe and Axis is the largest in a series of transactions in an otherwise fragmented sector, writes the FT. According to the agreements reached in PartnerRe shareholders will hold 51.6 percent of the combined company, while those in Axis will hold the remaining 48.4%. The market capitalization of the two companies is respectively 5.59 billion. Dollars and 5.04 billion. Dollars, the newspaper notes. According to proponents of increased transaction group will have a strong position on the management of structural changes in the sector, especially given that insurers and their brokers increasingly prefer to work with larger reinsurers.

Both companies were created after the increase in insurance premiums after tragedies - PartnerRe in 1993 after Hurricane "Andrew" and the Axis in 2001 after the terrorist attacks of September 11, the newspaper reminds. Fierce competition in recent years, however, lowered the cost of premiums in otherwise profitable business in the so-called reinsurance. catastrophic risks to their lowest levels in more than a decade, which encouraged consolidation in the sector.

Consolidation in the sector

Both companies have offices in New York, Zurich, Bermuda and Ireland intend to save cost at least 200 mln. USD within two years after the transaction. It is expected to be finalized in the second half of 2015 have yet to be decided how many of the jobs in the new structure will be curtailed. Currently, the two companies employ a total of 2,300 people, states FT.

Leading the new 14-member board will be the chairman of PartnerRe Jean-Paul Montupet. CEO Albert Benchimol, Axis will maintain the same position in the merged reinsurer.