Italian insurer Assicurazioni Generali SpA (ARZGY.PK) is planning an exit from the U.S. by putting its U.S. life reinsurance business up for sale, according to media reports on Tuesday.
Citigroup Inc. (C: Quote) is reportedly advising Generali on a sale of Generali USA Life Reassurance Co, which could be worth up to $1 billion. However, the sale process is said to be in its early stages, with potential buyers likely to receive sale documents in September.
After recently assuming the role as Generali's CEO, Mario Greco has said he will present a new strategic plan to restore profitability at the company and strengthen its capital. He is expected to outline plans for asset sales when Generali announces its third-quarter results on November 9.
Several European insurers have recently been selling their U.S. operations as part of their attempts to focus on core businesses and free up capital even as they grapple with the negative impact from the Eurozone debt crisis.
British insurer Aviva plc (AV: Quote,AV.L) reportedly received unsolicited bids in July from several financial and private equity groups for its U.S. life division, Aviva USA. The business is valued at 1 billion pounds.
In early August, Aviva reported a loss for the first half of the year, reflecting mainly a write-down of goodwill in its U.S. business and on higher restructuring costs.
Reinsurer Swiss Re (SSREY.PK, SSREF.PK) said in late May that it has agreed to sell its U.S. Admin Re holding company, Reassure America Life Insurance Co., to Jackson National Life Insurance for $621 million in cash. Jackson National Life is a unit of UK's Prudential Plc (PUK: Quote,PRU.L).
In early August, Generali reported an increase in profit for the first half of the year to 841.6 million euros or 0.55 euros per share, from 805.5 million euros or 0.52 euros per share in the year-ago period.
At that time, Generali said that in the absence of additional extraordinary factors and in light of the first-half results, it expects to report an improvement in its full-year 2012 operating result relative to 2011.
On the Milan stock exchange, Assicurazioni Generali closed Tuesday's trading at 11.54 euros, up 0.53 or 4.81 percent on a volume of 8.13 million shares.
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by RTT Staff Writer
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