GE to offload reinsurance arm: sources
US conglomerate General Electric is close to finalising a deal to cut loose its (re)insurance operations, according to sources.
Although the company declined to comment, The Insurance Insider understands GE is preparing an imminent announcement of the sale of all or part of GE Insurance Solutions to a trade buyer.
News of the divestment has been widely expected, with GE effectively putting a “For Sale” sign on the unit.
The head of GE Insurance Solutions Ron Pressman confirmed as much at the end of August when he revealed to Bloomberg that GE will probably “sell down to no involvement in the insurance sector”.
“Two to three years from now it probably will be a more robust (mergers and acquisitions) market. We’re patient. If something comes at us soon, great. If it takes a couple of years, so be it,” he added.
The comment came just a month after GE sold its Medical Protective Corp to Berkshire Hathaway for $825mn.
Speculation over GE’s commitment to its insurance arm has followed the company since 2002 which saw the injection of $1.8bn after-tax to recapitalise its loss struck reinsurance operations following a series of heavy reserve charges.
At the time, the company was thought to have entered into discussions with Berkshire Hathaway about a possible sale but nothing came to fruition.
The Insurance Insider understands that US investment banks had also looked at the possibility of a deal with reinsurance giant Swiss Re but, at the time, the relative size of GE’s (re)insurance operations (then Employers Reinsurance Corporation) had stymied a potential sale.
Published on November 17, 2005
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