Generali agrees sale of its US life reinsurance business to SCOR

• Total expected proceeds to Generali $920 million
• Successful disposal of a non-core asset with a consolidated capital gain of $150 million adding 1 p.p. to Solvency 1 ratio

Trieste – The Generali Group today signed a definitive agreement to sell its US life reinsurance business to SCOR. Total expected gross proceeds of $920 million comprise an estimated cash consideration for SCOR of $780 million at closing (including $30 million of estimated profit) and the release of $140 million of collateral.

This transaction is part of the strategy to withdraw from non-core businesses and optimise capital allocation announced by the Group in January. The deal includes the sale of 100% of Generali U.S. Holdings and its subsidiaries as well as the recapture of the business currently retroceded to Assicurazioni Generali.

The sale is expected to generate a capital gain net of taxes of approximately $150 million on a consolidated basis for the Group, further strengthening the Group’s liquidity position and improving the Solvency I ratio by approximately 1 percentage point. Total gross proceeds from the disposal correspond to an implied c. 15x multiple on 2012 full year earnings.

The Generali Group CEO Mario Greco said: “We continue to make steady progress in our strategy of disposing of non-core assets and strengthening the Group’s capital position. The sale of Generali US is a further step in the transformation of our Group and delivering against the goal of re-focusing on our core insurance business.”

Total gross proceeds of $920 million from the disposal, assuming a closing date of September 30, 2013, include the cash consideration from the sale of 100% of Generali U.S. Holdings and its subsidiaries for $780 million – equal to $750 million plus the estimated change in equity from January 1, 2013 to the closing date – and the further estimated amount of $140 million of collateral release arising from the recapture of the business currently retroceded to Assicurazioni Generali. Additionally, Generali will benefit from the release of the solvency capital currently required to support the business retroceded.

The sale is subject to approvals by the competent regulatory authorities and other customary conditions.

Generali U.S. Holdings controls Generali USA Life Reassurance Company – which provides reinsurance services for individual and group life products – and the captive company Generali Reassurance (Bermuda).

In 2012 the Group US business – including the Generali U.S. Holdings and its subsidiaries and the business retroceded to Assicurazioni Generali – registered a US GAAP net premium income of $925 million with a $62 million profit.

Following the transaction, the Generali Group will continue to be active in the United States in the P&C segment through its New York branch.

Citigroup and Mediobanca acted as financial advisers and Fried Frank and Cleary Gottlieb acted as legal advisers to Generali on the transaction.