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RenRe promises to treat TMR staff fairly

Expansion: RenRe has agreed to buy Tokio Millennium Re in a deal worth $1.5 billion

RenaissanceRe expects to realise some cost-saving benefits through its proposed takeover of Tokio Millenium Re — but it is too early for specifics on the impact on jobs.

Agreement on the $1.5 billion deal, which is expected to close in the first half of next year, was announced on Tuesday evening.

TMR, which is headquartered in Switzerland, has a branch office in Bermuda, where about 70 people are employed at offices in Chesney House on Pitts Bay Road.

In a presentation on the takeover, Bermudian reinsurer RenRe said it expected to achieve “material synergies” within the first two years — language that normally refers to cost reductions.

The company also reaffirmed its commitment to Bermuda and confirmed that the combined company would be headquartered on the island.

Asked about the potential impact of the combination on jobs, Kevin O’Donnell, chief executive officer of RenRe, told The Royal Gazette: “The entire RenaissanceRe team cares deeply about our people and partners.

“Where the acquisition of TMR impacts any Bermuda-based employees, they will be treated fairly and with respect, consistent with our core values.

“We remain firm in our belief that Bermuda is still the best place in the world to domicile and headquarter our company and we have long been committed to the island.

“The combined company will build further on RenaissanceRe’s global reinsurance leadership from our Bermuda headquarters.”

When RenRe acquired fellow Bermudian company Platinum Specialty Underwriters in 2015, around two-thirds of Platinum’s island-based staff of 37 were offered roles at RenRe, but about half ended up accepting redundancy packages.

With a market capitalisation of around $5.2 billion, RenRe has been periodically touted as a likely takeover target by industry observers.

This kind of speculation grew four weeks ago, when one of the firm’s institutional shareholders, TimesSquare Capital Management, revealed that it had pressed the reinsurer’s board of directors for “an immediate review of strategic alternatives, including an exploration of a potential sale of the company”.

RenRe believes it can eventually grow its annual earnings by about $100 million as a result of the combination with TMR.

The company, which is based in waterside offices on Crow Lane, is the sole, stand-alone survivor of the wave of companies that set up on the island in the wake of Hurricane Andrew and celebrated its 25th anniversary this year.