Generali sells pension business to Fosun’s German consolidator
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Generali has confirmed the sale of its specialist pension company Generali Deutschland Pensionskasse AG to German consolidator Frankfurter Leben, following media reports that the Italian insurer was preparing for the sale last month.
The sale price is undisclosed, but Generali said the deal is aligned with its Lifetime Partner 24: Driving Growth strategy, to “enhance its earnings profile through continuous improvement in the profile and profitability of the life business, reducing capital intensity and enhancing operating results”.
Stefan Lehmann, chief executive of Generali Deutschland, said: “With this transaction, we are continuing on the path we have taken of consistently aligning our life insurance portfolio to products with less capital commitment and protecting it against volatile market conditions. We are concentrating on new product generations that are even closer to the needs of our customers.”
The transaction will add around 10 percentage points to the German and 1 point to the group Solvency II positions respectively, said the Italian insurer.
Founded in 2002, Generali Deutschland Pensionskasse has around €2.8bn (£2.5bn) in capital reserves and 150,000 policies. Its portfolio was mainly written between 2003 and 2005. At the end of 2016, the company ceased writing new business.
Frankfurter Leben is a consolidation platform for run-off portfolios specialised in the German life insurance market. Its majority shareholder is Chinese conglomerate Fosun International.
Lehmann added: “I am pleased that we have an experienced partner at our side in Frankfurter Leben, who will continue the contracts with his specially designed business model in the best possible way in the interests of all customers and our sales departments.”
The transaction is expected to be completed by the end of 2023, subject to the approval of the German Federal Financial Supervisory Authority and the relevant antitrust authorities.
Goldman Sachs and Hengeler Mueller acted as financial and legal advisers, respectively, for the transaction.
In 2019, Generali sold its shares of Generali Leben to specialist legacy insurer Viridum, thus “improving the return on risk capital and mitigating the group’s exposure to interest rate risk”.
Last month, Belgian insurer Ageas and the UK entity of Dutch insurer Aegon offloaded separate portfolios to France’s Carac and the UK’s Royal London respectively.
Will the sale of Generali Deutschland Pensionskasse lead to job losses?
