Acquisition by Chinese funds an ‘opportunity’ for Asia Capital Re, claims its CEO

The purchase of ACR Capital Holdings by two Chinese state-owned companies will take the business to new heights, Hans-Peter Gerhardt, the chief executive of reinsurer Asia Capital Re (ACR), told EAIC Today.

“It’s a great moment for ACR,” he said. “We have been owned by financial investors who got us started for the first 10 years. The market has become much more challenging in recent years, and it was time for a change.”

To have found a strategic investor who wants to own the business to build and own it forever is a fantastic outcome, he added.

“Ultimately the capital behind it is the Chinese state; we can say we have found one of the best securities on the world for our clients and that gives us great confidence as we go into this year’s renewals.

“Obviously the deal still has to close and we are working with all the key regulators to get these approvals, hopefully before year-end, so we can communicate that to our clients. We have kept the regulators informed along the way so the story is very familiar already and we have great confidence that they will go along with the solution we found for the company,” Gerhardt said.

The buyers—Shenzhen Qianhai Financial Holdings and Shenzhen Investment Holdings—were attracted by ACR’s decade of experience and existing broad network in Asia.

“They felt the combination of a very loyal client base, and—as we operate across all lines of the P&C business—the skill base within the company was an attractive platform for them to realise their ambitions outside China a lot faster than organic growth would allow.

“We still need to sit down with our prospective owners—the deal hasn’t closed yet—and discuss details of the strategy for 2017,” Gerhardt said.

In the meantime, he said, it is business as usual, so there will be no immediate radical shifts, although discussions will take place around expanding into new territories.

“The area in our business where we need this for diversification reasons the most would be catastrophe exposures: Asia doesn’t produce a very homogenous risk profile to make a cat-exposed portfolio in Asia only sustainable.”

ACR is also deepening its presence in the Asian region, having just opened a branch office in Korea.