China Re’s acquisition of Chaucer is credit positive

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China Re’s acquisition of Chaucer from Hanover Insurance coverage is credit score constructive for the Chinese language state-owned reinsurer, based on Moody’s.

The ranking company says that the addition of Chaucer will complement China Re’s current product choices and improve its geographic diversification.

The transaction can be credit score constructive for Hanover as it’s going to enhance its capital adequacy by lowering its disaster and different underwriting danger, and can decrease its monetary leverage.

“Chaucer’s deal with underwriting specialty dangers, particularly marine, aviation and political danger, will complement China Re’s current property and casualty (P&C) (re)insurance coverage merchandise, that are targeting the standard motor and property sectors,” stated Moody’s in a report.

The acquisition will even enhance China Re’s profitability and is small in contrast with its massive capital base of Rmb85.6 billion (US$12.5 billion).

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