Chubb boosts reinsurance purchase from partially owned ABR Re in 2016

Zurich-based property/casualty insurer Chubb Group has bought more than twice as much reinsurance protection from ABR Re in 2016 than in the previous year.

Chubb owns an 11.3 percent equity stake in Bermuda-based ABR Reinsurance Capital Holdings and warrants to acquire an additional 0.5 percent, according to the insurer’s 2016 annual report. ABR Reinsurance Capital Holdings is the parent company of ABR Re.

Ceded reinsurance premiums to ABR Re jumped to $288 million in 2016 compared to $115 million in 2015.

The amount of reinsurance recoverable on losses and loss expenses increased to $148 million from $82 million over the period.

At the same time, the amount of ceded reinsurance premium payable included in insurance and reinsurance balances payable in the consolidated balance sheet was $53 million compared to $6 million, Chubb said.

As part of a long-term arrangement, Chubb will be the sole source of reinsurance risks ceded to ABR Re. Asset manager BlackRock will be ABR Re’s exclusive investment management service provider.

As an investor, Chubb is expected to benefit from underwriting profit generated by ABR Re’s reinsuring a wide range of Chubb’s primary insurance business and the income and capital appreciation BlackRock seeks to deliver through its investment management services. In addition, Chubb has entered into an arrangement with BlackRock under which both Chubb and BlackRock will be entitled to an equal share of the aggregate amount of certain fees, including underwriting and investment management performance related fees, in connection with their respective reinsurance and investment management arrangements with ABR Re.

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