Press Release - SEPTEMBER 14, 2018

A.M. Best Comments on Credit Ratings of China Reinsurance (Group) Corp. and Its Subsidiaries Following Acquisition Announcement


CONTACTS:
 Christie Lee
Director, Analytics
+852 2827 3413
christie.lee@ambest.com

John Andre
Managing Director, Analytics
+1 903 439 2200, ext. 5619
john.andre@ambest.com
Christopher Sharkey
Manager, Public Relations
(908) 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
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james.peavy@ambest.com

FOR IMMEDIATE RELEASE

HONG KONG - SEPTEMBER 14, 2018
A.M. Best has commented that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of China Reinsurance (Group) Corporation (China Re) (China) and its subsidiaries remain unchanged following its announced acquisition of The Hanover Insurance International Holdings Ltd., Chaucer Insurance Company Designated Activity Company and The Hanover Australia Holding Company Pty Ltd (collectively referred to as Chaucer).

This Credit Rating (rating) commentary follows China Re’s announcement on Sept. 13, 2018, that it has entered into an equity acquisition agreement with The Hanover Insurance Group, Inc., under which China Re will acquire 100% equity interest of Chaucer. Under the terms of the transaction, China Re will pay USD 865 million (USD 820 million upfront consideration plus contingent consideration of up to USD 45 million). The transaction remains subject to regulatory approval and is expected to close in the first quarter of 2019.

A.M. Best’s view is that the proposed acquisition will allow China Re to gain a meaningful presence in the international primary property/casualty and reinsurance markets, through diversifying its risks by jurisdiction and line of business. It also brings potential long-term benefits of Chaucer’s specialty-line expertise, especially in the areas of political and nuclear risks, which could allow China Re to enhance its underwriting capabilities and competitiveness to serve opportunities resulting from the Chinese Belt and Road initiative.

China Re’s subsidiaries include China Property & Casualty Reinsurance Company Ltd., China Life Reinsurance Company Ltd. and China Continent Property & Casualty Insurance Company Ltd. A.M. Best will continue to discuss with China Re’s management its new international business plan and the subsequent implications on its business profile. A.M. Best also will monitor the post-merger integration process of Chaucer into China Re upon completion of the transaction.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.


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