Tower Group International, Ltd.
) has announced that it is terminating its previously announced
agreement to buy American Safety Reinsurance, Ltd. (ASRe).
As a part of a long term strategy to expand its presence in
the specialty reinsurance business in June, Tower Group announced
to buy ASRe, the reinsurance subsidiary of American Safety
Insurance Holdings, Ltd. (ASI). The company had agreed to buy
ASRe from Fairfax Financial Holdings Limited (Fairfax Financial)
for approximately $59 million.
Since the agreement has been terminated, Tower Group will
receive $5 million as compensatory charges.
Fairfax Financial will now sell ASRe to Catalina Holdings
The acquisition would have expanded the operation of Tower Re
which currently carries out the company's specialty reinsurance
business. Tower Re was formed in the first quarter of 2013,
following the merger of Tower with Canopius.
Tower Re currently writes qualifying quota share reinsurance
treaty business for Lloyd's syndicates and property
retrocessional excess quota share business underwritten with
The acquisition of ASRe, would have enabled the company to
gain instant access to the former company's skilled casualty
underwriting, support staff and extensive network of reinsurance
brokers and specialty insurance company clients in the U.S.
The company has made a number of acquisitions in recent years.
With the fallout of the ASRe deal we expect the company to look
out for a similar acquisition opportunity.
Tower Group presently carries a Zacks Rank #3 (Hold). Property
and casualty insurers ,
HCI Group Inc.
Everest Re Ltd.
State Auto Financial Corp.
), carry favorable Zacks Rank #1 (Strong Buy) and look
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