London was set for the biggest stock-market debut of the year today as insurance giant Swiss Re’s UK arm ReAssure laid plans for a £3.5 billion float.
Another company, CVC-backed warranty-seller Domestic & General, is also expected to launch an IPO next week, the Standard understands.
That would give London’s moribund float stock market fresh impetus after the worst period in nearly a decade.
Swiss Re, the world’s second-biggest reinsurer, will cut its 75% stake in the London-based company to propel it into the FTSE 100. Japanese insurer MS&AD owns 25% and is not selling. No new money will be raised.
Swiss Re is selling down to free up capital. The reinsurer is regulated under Swiss solvency rules, which take a stricter view on ReAssure’s capital needs. That ties up funds which could be used elsewhere.
ReAssure, which has four million UK policyholders, is a so-called consolidator, buying up old books of life insurance policies sold to customers decades ago.
Its rivals include Phoenix, which is listed on the FTSE 100.
The company expects to pay a dividend, which will lure in the majority of the City’s fund managers who buy income stocks.
So far the company has done 22 deals, including the jumbo £1.6 billion take-over of Guardian Financial Services and snapping up Legal & General’s old book of policies.
“It’s a win-win. This is good for Swiss Re and it’s good for us,” said chief Mark Hodges.
“The company has been run on an independent basis in the UK. We think there’s a very exciting pipeline. There are deals we can do and we want to access fresh capital to pursue those opportunities.”
The first quarter of 2019 was the slowest period for listings since 2011 but the threat of the Brexit deadline in October has forced many to come to market now.
Bank sources say companies have an opportunity over the next six weeks before the window for new listings slams shut again as people prepare for more Brexit woes.
There have been a flurry of floats recently including Trainline, Watches of Switzerland, Finablr, Network International and Loungers.
Domestic & General, valued at £1.25 billion, is similar to Homeserve. One in three homes in Britain owns a D&G policy. D&G declined to comment.
