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Munich Re offloads Australian long-tail lines

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A subsidiary of US-listed and Bermuda-based insurance group Enstar is set to acquire $228 million worth of long-tail insurance portfolios in Australia from Munich Re-owned entities.

The valuation is based on the total assets Enstar-owned Gordian would own for assuming the associated net insurance reserves of the Australian branches of Great Lakes Insurance and HSB Engineering Insurance.

The sale is subject to approval from regulators and the Federal Court of Australia, the two parties say.

“The parties will pursue a portfolio transfer of the insurance business under… Australia’s Insurance Act, which would provide legal finality for Munich Re,” Enstar says in a statement.

They did not provide details of the long-tail books being offloaded, and global law firm Ashurst, which advised the German reinsurer in the transaction, told today it is unable to release the information.

According to its 2018 annual report, Enstar acquires and manages insurance and reinsurance companies and portfolios of insurance and reinsurance business in run-off.

“Since formation, we have completed the acquisition of more than 90 insurance and reinsurance companies and portfolios of business.”

Australia is part of the network comprising of Bermuda, the US , the UK, continental Europe and other global locations.

Gordian, which was acquired by Enstar in 2008, has featured in a number of insurance run-offs in Australia, including AMP’s disposal of GIO assets in 2002 after a ruinous takeover battle, and Zurich’s offloading of its NSW compulsory third party business last year.

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