Michele Bareggi, Group CEO at Athora
Bermuda-based Athora Holding, which is focused on European savings and retirement business, has agreed, using its subsidiary Athora Deutschland, to acquire a closed book portfolio of deferred annuities and endowments of the former DBV-Winterthur Life (DWL) from AXA Germany.
The book, representing €19 billion in assets under administration, will be acquired for a purchase price of €610 million, which is a significant discount to own funds. Including an estimated €50 million of statutory earnings for 2022, AXA Germany is expected to receive €660 million.
Subject to closing, Athora Germany will have €24 billion of AuA and 1.1 million customers, helping it to achieve economies of scale in Europe’s second largest life insurance market.
Prior to closing of the transaction, AXA Germany will transfer the portfolio and its associated balance sheet to a company which will be acquired by Athora Germany and integrated under the Athora brand.
Athora Germany and AXA Germany will also sign extensive service agreements for the five-year transition period during which the portfolio will gradually migrate to Athora. As part of the transaction, AXA IM will continue to provide certain asset management services to Athora Germany, notably investment grade debt, until 2028.
The transaction, consistent with Athora’s growth strategy focused on traditional guaranteed savings and pension products in Europe, is expected to close by the end of 2023 subject to receipt of requisite regulatory and other approvals.
Athora has secured further equity commitments from existing shareholders and will finance the transaction consistently with its rating and leverage targets.
Michele Bareggi (pictured), Group CEO at Athora, said: “We have been strategically building Athora’s presence across Europe and are excited about the opportunity this deal provides for our growth in Germany. This highlights our position as a preferred solutions provider because of our robust capital position, deep expertise in the retirement services industry and proven track record of executing transactions to deliver value to counter-parties. We have a strong reputation for managing guaranteed savings portfolios in Germany – with significant emphasis placed on prudent investment, risk and capital management – and we intend to play a long-term role in meeting customer demand for these products in this important European market.”
Athora, AXA, Acquisition, Life & Pensions, Michele Bareggi, Bermuda, Germany, Insurance, Reinsurance