China Reinsurance Corporation (China Re) is to acquire Chaucer Group, an insurance group, for a fee of US$865mn.

It is purchasing Chaucer from Hanover Insurance Group, with the sale subject to shareholder and regulatory approval.

The acquisition will accelerate China Re’s overseas deployment, with Chaucer seen as a vehicle for increasing China Re’s underwriting and technical expertise.

In a statement, China Re says that Chaucer’s portfolio is very complementary to its own, in terms of territory and business mix. It will help China Re increase its exposure to the Lloyd’s market.

China Re Chairman, Yuan Linjiang, says: “The acquisition of Chaucer Group by China Re represents a significant milestone in our international development, as well as the next step following the establishment of China Re Syndicate 2088 at Lloyd’s and the Singapore Branch. The combination of China Re’s financial strength and access to capital will help consolidate Chaucer’s position and create new development opportunities.”

Chaucer is headquartered in London, with international hubs throughout Europe, Mena, Latin America and Asia. It is a well-known player in the political risk and credit insurance markets.

China Re, meanwhile, ranks top in Asia and eighth globally by reinsurance premium income, with premium topping US$16bn.

“As Asia’s leading reinsurance group pursuing international development, China Re regards Chaucer as an ideal partner. We are delighted to be acquiring a top quartile performer in the Lloyd’s market and respect senior management’s achievements to date in growing the business to this point. We look forward to working closely with John Fowle, Chaucer CEO, and the management team,” says He Chunlei, China Re president.