A wholly-owned subsidiary of Bermuda-based Enstar Group (ESGR) has acquired HSBC Insurance Company of Delaware and Household Life Insurance Company of Delaware as well as its three subsidiary insurers from Household Insurance Group Holding Company.
The London-based company purchased Household International in 2003 and merged with its subsidiary Household Finance Corporation.
Originally announced in September 2012, the deal was completed on 31 March, after receiving concerned regulatory approvals and satisfying various customary closing conditions.
Enstar CEO Dominic Silvester said, "Whilst our core focus remains non-life property and casualty run-off, we are excited to further expand our portfolio of run-offs with this acquisition of closed-life insurance business from HSBC."
The acquisition will add nearly $1.4bn in total cash and investments to Enstar.
The base purchase price of $181m was moved ahead under the terms of the stock purchase agreement based upon changes to the capital and surplus of the acquired entities arising from the operation of the business prior to closing.
At the time of closing, the amount paid was nearly $155.7m and was financed through a combination of cash on hand and a drawing under its revolving credit facility.
The acquired companies have written many US and Canadian life insurance, including credit insurance, term life insurance, assumed reinsurance, corporate owned life insurance, and annuities.
As part of its strategy to overhaul operations in order to boost the capital levels and improve efficiency, HSBC is divesting its non-core operations and assets to focus more on the rapidly-growing and profitable markets across the globe.
The UK company had disposed of more than 35 of its operations across the globe which were unprofitable and non-core operations as of September 2012, according to Zacks Equity Research.
Enstar purchases and operates insurance and reinsurance firms in run-off and portfolios of insurance and reinsurance business in run-off, and provides management, consultancy and other services to the insurance and reinsurance industry.
