Hannover Re merges specialty business with HDI Global

Talanx group units Hannover Re and HDI Global are merging their specialty activities in a new joint venture in order to capture global growth and high-margin specialty business.

The new company HDI Global Specialty will write agency and specialty insurance business in lines such as errors & omissions liability insurance, directors' and officers' (D&O) liability insurance, legal expenses insurance, sports and entertainment, aviation, offshore energy and animal insurance.

As part of the plan commercial insurer HDI Global is acquiring the majority of the shares in International Insurance Company of Hannover (Inter Hannover), a subsidiary company of Hannover Re, for around €100 million. After the transaction, Inter Hannover will be renamed HDI Global Specialty. HDI Global will contribute its specialty portfolio to the new company and hold 50.2 percent of the new company while Hannover Re will keep 49.8 percent of the shares.

HDI Global Specialty is being launched with a premium volume of more than €1 billion. As the company seeks organic growth, the individual share in earnings of Hannover Re and HDI Global is projected to be above the individual earnings contribution for both units in the current separate structure already in the year 2019.

"This step strengthens our roots as an industrial insurer,” said Torsten Leue, chairman of the board of management of Talanx. “The joint venture enables us to bring together the cross-business segment expertise we have in the area of specialty in one place within the group and concentrate our know-how. This allows us to focus on particularly profitable and high-growth market segments. The move creates a company that has an outstanding position in the specialty market and enjoys excellent growth perspectives," Leue explained.

Hannover Re CEO Ulrich Wallin added: "We have a number of reasons for bringing together the agency and specialty primary insurance business of Inter Hannover in the joint venture. This strengthens the focus on our core business in accordance with our strategy of ‘Creating value through reinsurance’. At the same time, reinsuring the portfolio enables us to derive even more benefit from the growth opportunities available in specialty business. We can then make use of the capital that becomes available as a result to grow the business further".

Christian Hinsch, chairman of the board of management of HDI Global, commented: "The bundled know-how of the new joint venture will help us to expand our position in the specialty market. We are creating a very strong company in line with our strategy of profitable growth. It has a highly competent team with a focused profile and the company will be operating worldwide. The speciality business has attractive above-average margins and is growing faster every year than classic industrial business. This highlights the demand and we want to benefit from that. We will provide our customers and broker partners with even more comprehensive service-based know-how."

Following regulatory approval, the joint venture is set to start operational activities on Jan 1, 2019.

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