Covéa, Exor talk of ‘mutual trust’ as they rekindle $9bn PartnerRe deal

Italy's  Exor and French mutual insurer  Covéa have rekindled their  $9 billion deal for Bermuda-based reinsurer PartnerRe, after calling it off amidst discussions over  renegotiating price on  ‘inferior’ terms — but the question remains: what changed in the last one and a half year considering the valuation remains same.

Exor believes the reinsurance and investment cooperation agreements implemented by the three parties in August 2020 have resulted in a greater appreciation of the shared culture and has facilitated a close cooperation between the PartnerRe and Covéa's executive and operating teams.

“The cooperation agreement signed in the summer of 2020 with Covéa has been positive in many ways and has contributed to a strong level of mutual trust between our companies,” explained John Elkann, chairman and chief executive officer of Exor.

PartnerRe is a “natural partner” for Covéa, according to Exor, which purchased the global multi-line reinsurer for about $6.9 billion in March 2016 after battling for months with its rival suitor AXIS. During the years of its ownership, Exor said it has worked closely with the PartnerRe management team to strengthen and grow the company’s business, creating a sizeable presence in life & health.

“ PartnerRe has further improved its performance and strengthened its distinctive capabilities. Together, these have created a new opportunity to significantly reinforce PartnerRe’s development as a global reinsurance company,” said Elkann.

Exor believes that following its acquisition, PartnerRe will enter the top tier of reinsurers worldwide, specifically in Europe where Covéa has a particularly strong presence.

Covéa agrees with the view that the two businesses are highly complementary both in terms of geographic presences and growth strategy.

“[ PartnerRe] fits perfectly with Covéa’s growth and diversification strategy, our ability to adapt and to bring together complementary expertise, extend our geographic reach and manage risks on a global basis,” said Thierry Derez (pictured left), chairman and chief executive of Covéa. “It would further strengthen the excellent prospects for PartnerRe and for our Group, serving the interests of our members and clients, as well as those of our employees and partners. And all this while continuing the reinsurance and investment partnerships we have successfully developed with Exor, and maintaining strong solvency and capital flexibility.”

“ PartnerRe has proved in the past year the relevance of its strategy, risk management and resilience in the pandemic’s uncertain environment and the quality of its management team.

“Our proposed transaction comes at the right time with the insurance sector undergoing a fundamental transformation,” noted Derez.

Commenting on the transaction, PartnerRe's chief executive officer Jacques Bonneau (pictured right), said the combination with Covéa represents an “important opportunity to grow profitably” and achieve its objectives even faster.

“Our focus at PartnerRe is on building a great and diversified (re)insurance business, constantly improving every aspect of our company, our expertise and the services we provide to our clients and broker partners,” he stated.

The transaction is subject to the consultation of Covéa workers councils, and the parties intend to sign the final agreement by the end of the year, with the deal closing in mid-2022.

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