December 9, 2005 by Canadian Underwriter
SCOR has agreed to terms with the Alea Group regarding the acquisition of the 2006 renewal rights relating to the Alea Europe property and casualty treaty portfolio.
The heads of terms include the payment in 2006 of a 9.5 % commission on gross written premiums on Alea Europe’s business renewed by SCOR in 2006. The two groups estimate the value of the renewal rights to be in the range of 8.3 million to 16.6 million euros, depending on the treaties actually renewed by SCOR.
“In compliance with its underwriting policy, The SCOR Group will ensure the continued service and financial security of Alea Europe’s clients, and will provide the necessary capacity available to this end,” The SCOR Group announced on its Web site. “This transaction will enable SCOR to consolidate its current presence on the major continental European markets where Alea Europe operates.”
Alea Europe’s underwriting teams will assist The SCOR Group in the current treaty renewals. The transaction is subject to conditions including the obtaining of regulatory approvals and the execution of definitive legal documentation.
The agreement with SCOR comes after Alea Group Holdings in November 2005 entered into an agreement to sell the renewal rights to certain portions of its US primary programme business written by Alea Alternative Risk (AAR) to subsidiaries of AmTrust Group, a privately held-, New York-based insurance and financial services company.
Shortly thereafter, Alea announced a second renewal rights deal. It agreed to sell the renewal rights of part of its London-based facilities insurance and reinsurance business to Canopius Holdings UK Ltd., the specialist Lloyd’s underwriter.
Alea announced that Standard & Poor’s Rating Services recently lowered the ratings of the companies that comprise the Alea Group to BBB as result of the sale of renewal rights by Alea London. The outlook on the rating is stable.
“Alea Europe Limited’s ability to underwrite business will be impaired by Standard and Poor’s action,” Alea said in a release.