ger­many eyes watch­dog rul­ing on in­surer

In­sur­ers and bankers in Ger­many are anx­iously await­ing a reg­u­la­tory de­ci­sion which could pave the way for a fresh wave of con­sol­i­da­tion and shake up the coun­try’s frag­mented in­sur­ance mar­ket. The Ger­man reg­u­la­tor, BaFin is por­ing over the planned sale by Lloyd’s Bank­ing Group of in­surer Hei­del­berger Leben. Se­nior bankers say that if the reg­u­la­tor waves through the £ 250 mil­lion ( R4.5 bil­lion) joint pur­chase, by pri­vate eq­uity group Cin­ven and the rein­surer Han­nover Re, it could kick- start con­sol­i­da­tion in the Ger­man in­sur­ance mar­ket sim­i­lar to that of the UK. The planned deal comes at a time of tur­moil for the Ger­man in­sur­ance in­dus­try. Low in­ter­est rates are harm­ing prof­its in a coun­try where gen­er­ous guar­an­teed rates are still paid to risk- averse con­sumers, who of­ten de­pend on in­sur­ance prod­ucts for a re­tire­ment in­come. BaFin re­cently in­di­cated it would take an open mind to the idea of sell­ing portfolios in run- off mode. But it has helped to scup­per pre­vi­ous sim­i­lar deals. An at­tempt by No­mura, the Ja­panese in­vest­ment bank, to take over the Ger­man run- off life in­sur­ance as­sets of Delta Lloyd in 2012 failed af­ter the Dutch in­surer said ne­go­ti­a­tions with BaFin had been more dif­fi­cult than ex­pected.

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