Swiss Re, the world's largest reinsurer, has agreed to buy Barclays' life assurance arm for £753m sterling in cash ($1.48 billion) to boost its Admin Re business in the UK.
Swiss Re said it would acquire about 760,000 life insurance and pension policies and annuity contracts, representing £6.8 billion pounds in invested assets.
Its CEO Jacques Aigrain said the deal showed that Swiss Re was strong enough to take advantage of tough markets.
Barclays said it expected a post-tax gain of about £330m on the sales. Excluding that gain, the transaction is not expected to have a material impact on its earnings per share.
Swiss Re also said it made a mark-to-market loss on structured credit default swaps (CDS) of 362 million Swiss francs ($345.7m) in the second quarter.
Unlike many other reinsurers - which reinsure risk for other insurance companies - Swiss Re has been hit hard by the credit crisis, having now notched up total writedowns of some 2.7 billion francs in its financial services unit, which creates products to transfer risk to capital markets.
Swiss Re, which had previously expected a further 350 million franc CDS writedown in the second quarter, said it expected 2008 and probably 2009 to be challenging years for the whole insurance industry, but maintained its targets.
