Achmea's life insurance division may be put up for sale. The cooperative insurer confirmed this on Monday after reporting it Financial Daily.
Achmea's life insurance division has one million customers, a portfolio for which the insurer must maintain approximately 3 billion euros in buffer capital. According to sources from the F.D that amount could also be approximately the acquisition price.
The insurer says that all options are being examined in an “exploration” into the future of the Pension & Life Insurance department. If Achmea ultimately puts the division up for sale, the cooperative insurer would follow a broad trend within the insurance sector to divest life insurance.
In addition to sales, Achmea will also investigate options such as reinsuring the risk of the portfolio, collaborating with another party or becoming a buyer itself on the life insurance market in order to obtain larger volumes, a spokesperson said. According to it F.D the insurer has hired the American investment bank JP Morgan to weigh all options.
Usury policy scandal
Many insurers have already preceded Achmea in looking for an 'other option' for the life insurance portfolio. This concerns insurance products in which customers receive an amount after a certain term of ten, twenty or thirty years. Such products, which include investment insurance, were a popular product among all Dutch insurers, especially in the 1990s. Partly due to the extortionate policy scandal, but also due to tightened tax and capital rules, all insurers have stopped offering these products.
As a result, no new customers are added. Because at the same time the costs of managing the portfolio for existing customers remain the same – such as for ICT and for investing the premiums in order to make the promised payouts – these portfolios cause financial problems for insurers.
Consolidation battle
This has led to major consolidation in the insurance world in recent years. The idea: by combining multiple portfolios, the costs per participant can be reduced. And the theory is that by being able to invest larger amounts, returns can also be increased.
With that idea, ASR bought a large 'life book' with the takeover of Aegon Netherlands last year. Previously, Athora, which bought life insurance branches in several countries, took over the life part from the Vivat estate (the non-life part of that insurer then went to NN). The British Chesnara, active in the Netherlands under the name Waard Verzekeringen, took over life books from, among others, Robein, Monuta, Argenta and Brand New Day.
Board chairman Bianca Tetteroo said against it a year ago F.D that Achmea is interested in more acquisitions. To date, the cooperative Achmea has only purchased ABN Amro's premium pension institution – which is a different pension product than life insurance. Growth in such other pension products may offer a way for the cooperative insurer to get rid of the problem of expiring life insurance policies. The new pension law can also be positive for the insurer, because under the new rules participants may more often start saving individually for their pension. “We are well positioned for this,” Achmea said in its 2022 annual report.
#Life #insurance #branch #Achmea #possibly #shop #window
