QBE AND HANNOVER COMPLETE PRAETORIAN DEAL

German reinsurer Hannover Re yesterday formally completed the handover of its US subsidiary Praetorian Financial to Australia-based insurer QBE. The sale was agreed last December and has now obtained the formal approval of the regulators. QBE has paid slightly over $800m for the operation. Hannover Re CEO Wilhelm Zeller said that the released risk capital would be invested in non-life and life/health reinsurance business, and that this would “more than offset the loss of Praetorian’s profit contribution”. The reinsurer said that it would be raising its retention in the “still lucrative” property catastrophe market through the writing of additional US cat business as well as cultivating new markets such as those in Central and Eastern Europe and in the Islamic world. Hannover Re has already increased its stake in subsidiary E&S Rück to 65.8% from 55.8%, effective April 1 2007. Meanwhile, QBE forecast annual profits of A$380m (US$315m) from its Praetorian subsidiary and from the US arm of AXA’s Winterthur unit, the purchase of which was also formally completed yesterday, at a price of $1.156bn