PartnerRe Ltd. said it plans to acquire California-based Presidio Reinsurance Group, a U.S. specialty accident and health reinsurance and insurance writer. Presidio Reinsurance Group is comprised mainly of a managing general agency and a reinsurance carrier. PartnerRe will pay $72 million as consideration for the MGA, plus tangible book value as consideration for the Presidio reinsurance carrier, with book value to be determined at the time of the closing. Additional consideration may be paid if the acquired business exceeds certain profitability targets over time, PartnerRe said in a statement.
Presidio Reinsurance Group underwrites about $250 million of accident and health premiums. The Presidio Reinsurance Group is a writer of HMO reinsurance and provider of stop-loss insurance in the United States. It writes medical treaty reinsurance, employer stop-loss insurance, and accident insurance and reinsurance.
The current management team of the Presidio Reinsurance Group will be retained, including its founder and chief executive officer, Dennis Heinzig.
PartnerRe President and CEO Costas Miranthis said the acquisition is "consistent with PartnerRe's long-standing diversified strategy and provides us with another specialty risk class, which we do not currently access. The Presidio accident and health business complements our portfolio well and has limited correlation with our existing book of risks. As we continue to operate under somewhat challenging market conditions, we expect this new risk class will add consistent risk-adjusted profitability to the overall portfolio."
In October, PartnerRe said it expected to post a third-quarter $63 million after-tax charge related to crop insurance losses from the severe drought in the United States. The net loss was driven primarily by the company's U.S. proportional and non-proportional multiperil crop insurance portfolio. PartnerRe said it expects full-year 2012 underwriting year premiums for this portfolio to be about $200 million with losses of $255 million.