Jan. 16 (Bloomberg) -- Goldman Sachs Group Inc. said it’s weighing whether to sell a stake in its reinsurance unit, which generated $1.08 billion of revenue last year.
The business may be “better held in other people’s hands and we can be a minority owner” after global capital rules take effect, Harvey M. Schwartz, who is set to become chief financial officer this month, said today on a conference call after New York-based Goldman Sachs reported fourth-quarter results.
It was the first time the bank disclosed the contribution of its Goldman Sachs Reinsurance Group. Reinsurance revenue climbed 23 percent last year from 2011 and accounted for 13 percent of the firm’s $8.21 billion of equities revenue.
Goldman Sachs is in talks to sell a majority stake in the business in a deal that would value the unit at about $1.1 billion, Insurance Insider reported yesterday. David Wells, a company spokesman, declined to comment on the report.
The division has a global property and casualty reinsurance business as well as life and annuity reinsurance operations primarily in the U.S. Goldman Sachs agreed in March to buy Ariel Holdings Ltd.’s Bermuda-based insurance and reinsurance businesses to expand property and casualty coverage.
Increased reserves in the reinsurance unit added to non-compensation expenses, the firm said today without providing figures.
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