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AXIS Capital and PartnerRe to combine in USD11bn merger

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AXIS Capital Holdings Limited and PartnerRe are to combine their two businesses to create a specialty insurance and reinsurance company with gross premiums written in excess of USD10 billion. 

Total capital will be more than USD14 billion, and cash and invested assets more than USD33 billion. 

The merger of equals has been unanimously approved by the boards of directors of both companies, and brings together market-leading insurance and reinsurance franchises that will benefit from increased scale and enhanced market presence.

Under the terms of the transaction agreement, PartnerRe shareholders will receive 2.18 shares of the combined company’s common shares for each share of PartnerRe common shares they own and AXIS Capital shareholders will receive one share of the combined company’s common shares for each share of AXIS Capital common shares they own. Upon completion of the transaction, shareholders of PartnerRe and AXIS Capital will own approximately 51.6 per cent and 48.4 per cent of the combined company, respectively.

PartnerRe chairman, Jean-Paul L Montupet will be non-executive chairman of the combined company. AXIS Capital CEO Albert A. Benchimol will serve as CEO of the combined company. The new company will have a 14-person Board of Directors, consisting of seven AXIS Capital directors and seven PartnerRe directors, including Montupet and Benchimol. Current AXIS Capital chairman, Michael A Butt will continue to serve on the Board as Chairman Emeritus.

Benchimol says: “This transformational combination will leverage the complementary strengths of both companies and create an organisation with the size and breadth to enhance product and service offerings, maximise growth opportunities, optimise portfolios, and deliver both economies of scale and capital efficiencies. The combined company will have three strongly positioned businesses – a top-five global reinsurer, a USD2.5 billion specialty insurance underwriting business, and a highly successful and growing life, accident and health franchise – all with increased strategic flexibility. As a top five global reinsurer with leading positions in a number of specialty lines, we will be strongly positioned to turn the challenges presented by the structural changes in the reinsurance market into opportunities.

“For our clients and brokers, this transaction brings together two companies with outstanding underwriting talent and service to deliver more comprehensive solutions backed by the financial strength they have come to rely on from both companies. I look forward to working closely together to make this vision a reality, while achieving diversified and consistent earnings growth for our shareholders.”

In connection with the transaction, Costas Miranthis will step down as CEO of PartnerRe and as a member of the PartnerRe Board, effective immediately. At that time, current PartnerRe Director David Zwiener will assume the position of interim CEO of PartnerRe until the completion of the transaction.

Zwiener has been a director of PartnerRe since July 2009 and, prior to this transaction, was the Chairman of the PartnerRe Audit Committee. Zwiener has extensive executive level experience in both the insurance and financial services sectors. Between 2000 and 2007, Zwiener was President and Chief Operating Officer of the property and casualty operations at Hartford Financial Services Group Inc. Most recently, he was CFO at Wachovia Corporation.

Jean-Paul L Montupet, Chairman of PartnerRe, says: “On behalf of the entire board of directors, I want to express my appreciation to Costas Miranthis for successfully leading PartnerRe for the past four years and positioning the Company to be able to move into this exciting new phase. PartnerRe has benefitted greatly from his leadership and guidance and we wish him well in his next endeavor. This is an exciting opportunity that offers tremendous potential with many benefits for PartnerRe, our clients, brokers and shareholders.”

Butt, says “I have for a long time, since 1993, been an admirer of PartnerRe and what it has achieved. I am delighted therefore that we can now combine our businesses and people to create an even more exciting future.

Miranthis says: “It has been my pleasure to serve as PartnerRe’s CEO as we continued to build upon its leadership position in reinsurance. This merger with AXIS Capital offers a unique opportunity to enhance PartnerRe’s scale in the reinsurance sector and to enter the primary insurance market with a high quality partner with a global franchise. This is the right step for PartnerRe at the right time – squarely addressing the strategic imperatives that today’s markets are demanding. I want to thank the PartnerRe Board and all of my colleagues for their support and contribution to our success. I am confident that the new company will enjoy an exciting future.”

The company headquarters will be located in Bermuda, and it will have a strategic presence on five continents in 39 distinct geographic locations worldwide.

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