Swiss Reinsurance to Buy Underwriters Re

Swiss Reinsurance Co., the world’s second-largest reinsurer, will buy Underwriters Re Group Inc., based in Calabasas, for $725 million, doubling its revenue from underwriting property and casualty insurers in the world’s biggest market. Swiss Re is buying Underwriters Re from Alleghany Corp. for cash. Last year, Underwriters Re had premiums of $549 million and assets of $1.7 billion. The overcrowded property and casualty market is expected to recover next year after a price war eroded profit margins in the last decade. The purchase of Underwriters would make Swiss Re the fourth-largest nonlife insurer in the U.S., with premiums of about $1.1 billion from that business. New York-based Alleghany Corp., which has interests ranging from insurance to importing steel fasteners, is increasingly focusing on money management, which offers steady returns. In May, Alleghany’s asset management unit bought Blairlogie Capital Management from Newport Beach-based Pimco Advisors Holdings, giving Alleghany its first two international mutual funds. Alleghany shares gained $10.25 to close at $204.25 on the New York Stock Exchange; Swiss Re’s American depositary receipts rose $1.50 to close at $104.75 in over-the-counter trading.