With lower levels of investment income combining with tough new regulations, insurers across Europe are looking to sell off portfolios of general insurance business closed to new customers, according to a new report.
Reuters has outlined how companies are looking to dispose of portfolios ranging from motor policies to medical negligence and employers’ liability. The move follows on from the introduction of Solvency II rules back in January that saw the pensions and life markets consolidated – but now insurers are also looking to offload non-life business to market specialists.
According to Arndt Gossman, chief executive at German insurer Darag, speaking to the newswire, sales of these portfolios could reach a record five billion euros this year. He already estimates that around 2.5 billion euros worth of deals have been agreed during the first half of the year – this compares to two billion euros during the whole of last year.
Willis Towers Watson reports that more than half of insurers in Western Europe wish to sell at least one closed insurance business during the next three years.
Focusing specifically on the UK life insurance sector, for example, Deutsche Bank has plans to sell Abbey Life; while
AXA recently sold its life business; and Aegon has offloaded a £12 billion book of annuities. Meanwhile, non-life deals that have occurred recently include
Allianz’s transfer of $1.1 billion in closed US books as part of a reinsurance deal with Enstar.
According to industry sources referenced by
Reuters, many private equity firms could be looking to build a significant presence in the sector.
In addition, the newswire quotes sources suggesting that a deal is in the works for the sale of The Hartford’s closed non-life business.
Related Links:
Compre makes fourth acquisition of the year
Sale of Abbey Life Assurance hit by regulator investigation
