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4.4 Major disposals

On 21 December 2010 Hannover Re reached agreement on the sale of the operational companies of its US subgroup Clarendon Insurance Group, Inc. (CIGI), Wilmington, to Enstar Group Ltd., Hamilton, Bermuda, a company specialising in the run-off of insurance business. The transaction received the customary regulatory approvals on 8 July 2011; closing and deconsolidation subsequently took place on 12 July 2011. Hannover Re holds all shares of CIGI indirectly through the intermediate holding company Hannover Finance, Inc. (HFI), Wilmington, which is also included in full in the consolidated financial statement. The agreed purchase price is USD 219.1 million.

Pursuant to IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” the subsidiaries of CIGI constituted a disposal group, which was to be measured at the lower of the carrying amount and fair value less costs to sell. The measurement of the disposal group gave rise to income of EUR 7.9 million in the current financial year. The income was recognised in other income and expenses.

The cumulative other comprehensive income of –EUR 23.1 million arising out of the currency translation of the assets and liabilities belonging to the disposal group was realised in the context of deconsolidation. Profits from the measurement of available-for-sale financial assets were realised in an amount of EUR 5.2 million upon deconsolidation and recognised in other income and expenses.

In compliance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” we recognised the assets and liabilities of the disposal group in corresponding balance sheet items that were distinct from continuing operations. Transactions between the disposal group and the Group’s continuing operations were entirely eliminated in conformity with IAS 27 “Consolidated and Separate Financial Statements”.

The assets and liabilities of the disposal group are presented in the following table and broken down into their major components.

Assets and liabilities of the disposal group
in EUR thousand
12.07.2011 31.12.2010
Total investments 577,503 643,060
Cash 15,679 27,474
Reinsurance recoverables on unpaid claims 782,520 831,093
Accounts receivable 4,515 16,916
Other assets 15,722 10,812
Assets held for sale 1,395,939 1,529,355
Technical provisions 1,205,679 1,309,860
Funds withheld 18,350 26,713
Reinsurance payable 10,794 17,612
Other liabilities 21,281 26,935
Liabilities related to assets held for sale 1,256,104 1,381,120


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