Frankfurter Leben, the German Pensionskassen and life insurance group, has acquired the Pensionskasse of Generali Deutschland, the subsidiary of the Italian insurance group, it announced last week.
Frankfurter Leben takes over close to 150,000 insurance contracts and around €2.8bn invested assets from Generali’s Pensionskasse.
Last year, Generali Deutschland Pensionskasse returned €62.6m from capital invested, with bearer bonds and fixed income securities representing the largest share of assets (85%) worth €2.49bn, while 8.3% is invested in promissory notes, bonds and other loans, and equities and other non-fixed-income securities amount to 5.5%, according to the Pensionskasse’s financial statement for 2022.
The transfer of contracts and assets from Generali Deutschland Pensionskasse to the Frankfurter Leben group is subject to approval by the German Federal Financial Supervisory Authority (BaFin).
Pensionskassen and insurance companies have found it hard to fulfill guarantees and obligations during the past years of low or negative interest rates.
Generali Deutschland Pensionskasse had decided to beef up actuarial reserves since 2014 because of low interest rates, with BaFin’s approval, for contracts with an actuarial interest rate of 3.25%, and since 2016 also for contracts with an actuarial interest rate of 2.75%, its statement added.
It had then strengthened actuarial reserves for the first time for contracts with an actuarial interest rate of 2.25%, and of 1.75%, it said.
BaFin expects consolidation in the industry, with over half of Pensionskassen closed for new members, and contributions stagnating for years, executive director Frank Grund said.
Generali Deutschland Pensionskasse has closed the new business for members in 2016.
For Frankfurter Leben, which manages Frankfurter Lebensversicherung, Frankfurt Münchener Lebensversicherung, formerly ARAG Lebensversicherung, Pro bAV Pensionskasse and Prudentia Pensionskasse, for a total of 700,000 contracts, Generali Pensionskasse is the fifth takeover of a German life insurer and occupational pensions institution.
The transaction is expected to be completed by the end of 2023, subject to approval by German authorities, Generali noted.
Stefan Lehmann, chief executive officer 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, protecting it against volatile market conditions.”
The transaction is in line with the Generali Group’s strategy ’Lifetime Partner 24: Driving Growth’, with Generali Deutschland expecting to increase its solvency ratio by around 10 percentage points, it said.
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