QBE hands RiverStone $1.6bn of long-tail reserves in three-book transfer
The loss portfolio transfers cover North American middle market, workers' compensation and European liability books, and remain subject to regulatory approval.
RiverStone International has entered into loss portfolio transfer reinsurance agreements with QBE Insurance Group covering approximately US$1.6 billion of reserves, the legacy specialist said on 14 August.
The transactions cover QBE's North American middle market and workers' compensation portfolios together with European liability books — three distinct long-tail exposures moved in one transaction rather than a single runoff book. They remain subject to regulatory approval.
A loss portfolio transfer moves the reserves, and the risk that they prove inadequate, to a specialist reinsurer in exchange for a premium. For the ceding insurer the appeal is finality: capital held against decades-old liabilities is released, and the earnings volatility that comes with re-estimating them each year goes with it. For an insurance investor, the relevant consequence is on the asset side — reserves transferred are assets transferred, and a book of this size moves the associated investment portfolio out of QBE's balance sheet and onto RiverStone's.
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