Axa, has agreed to sell its reinsurance unit to a group of investors led by UK-based equity company Stone Point Capital.

The group has created the company Paris Re Holdings, with a capitalisation about $US1.5 billion ($2 billion), to buy Axa Re.

Axa says the business of Axa Re is expected to be ceded in 2007 to Paris Re Holdings, with the risks and corresponding net income related to Axa Re’s 2006 claims experience accruing to Paris Re Holdings.

Axa will continue to manage underwriting and claims for this year and prior years, and the insurer will guarantee the reserves pertaining to losses incurred on or before December 31 last year.