Swiss Re is understood to be purchasing the insurance solutions arm of General Electric for 4.16bn.
The takeover is expected to shake up the protection market due to Swiss Re’s and GE’s opposing stances on guaranteed rates, while investors are understood to be worried about a lack of synergies between the two firms.
The reinsurer says funding for the deal will require 4.6bn in new capital to grow and diversify its business although the deal has not yet been confirmed.
Ther capital hike will include up to 3.36bn in shares and mandatory convertibles and that GE is expected to hold over 10 per cent of Swiss Re shares as a result of the deal.
GE is also expected to be scaling back its reinsurance operations to improve overall returns and has already ceased writing new life reinsurance business in the US.