German insurer buys €1.8bn Pensionskasse in ‘run-off’ deal

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The Cofra Group, owner of fashion company C&A, has sold its German Pensionskasse to Frankfurter Leben-Gruppe (Frankfurt Leben).

In total, €1.8bn in assets run for C&A’s 50,000 current and former employees in Germany were transferred to the run-off platform.

The sale of Prudentia PK follows Frankfurt Leben’s purchase of AXA’s €3bn multi-employer Pensionskasse Pro bAV in February. The insurer now runs roughly €10bn of pensions and insurance assets.

Frankfurt Leben, which specialises in running closed asset pools, said it would continue to run C&A’s pension plan and make payouts.

“We are aware of the importance of occupational pensions for employees of the Cofra group, especially those of C&A and we will take on this responsibility unreservedly,” said Bernd Neumann, the insurer’s chief financial officer.

No statement was made by C&A or Prudentia on the deal, which is still subject to approval by German supervisor BaFin.

The sale of the Pensionskasse could be connected to rumours about a possible sale of C&A by Cofra, which has been reported in the German press.

Frankfurt Leben is owned by Chinese finance group Fosun and is one of several run-off platforms to have started operating in the German market over the past two years.

Life insurance companies and German Pensionskassen alike are struggling with the current low-interest rate scenario, which has challenged their ability to keep promises made in different market environments.

By selling businesses to run-off platforms, companies can take some liabilities off their balance sheet. Experts have also argued that pension plans with falling memberships can benefit from pooling together on such platforms.