insurer, and Talanx, Germany’s third-largest insurer, have formed a
strategic partnership aimed at fostering co-operation in a number
of areas including distribution, life insurance solutions in
international markets and life reinsurance.
Reinforcing the partnership, Talanx will
increase its stake in Swiss Life from 2.9 percent to up to 9.9
percent. Talanx will also acquire another 3 percent stake from
Swiss Life’s treasury holdings of its own shares and further build
its stake by buying Swiss Life shares on the market.
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While no financial details were provided, an
indication can be derived from Swiss Life’s market capitalisation
of CHF2.8 billion ($2.44 billion) on 31 March 2009. Talanx is not
seeking a seat on Swiss Life’s board of directors.
In addition to its stake in Swiss Life, Talanx
will buy an 8.4 percent stake in German financial advisory firm MLP
Group from Swiss Life.
This increases Talanx’s stake in MLP to 9.9
percent and reduces Swiss Life’s stake from 15.9 percent to 7.5
percent. Swiss Life indicated that it is in discussions to reduce
its MLP stake further.
This goes a long way to ending what has been a
very unhappy relationship between Swiss Life and MLP since Swiss
Life acquired a strategic stake in MLP for €307 million ($415
million) in August 2008. From the start MLP expressed the view that
Swiss Life threatened its independence and business model.
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By GlobalDataMLP took steps to reduce what would have been
Swiss Life’s 26.75 percent stake by placing new shares with the
German units of insurers Allianz and Axa in August 2008. This move
left Swiss Life with an initial 24.2 percent stake in MLP.
MLP represented Swiss Life’s second major
foray into the financial advisory sector in 2008 and followed its
acquisition of a 97 percent stake in German-based financial
advisory firm AWD Holdings for CHF1.7 billion.
As part of the agreement between Talanx and
Swiss Life, Talanx will become a key product partner of AWD which
has operations in Germany, the UK, Switzerland, Austria and Central
and Eastern Europe.
AWD ended 2008 with 6,009 active advisers and
reported that during the year 429,100 customers had sought
financial advice from it. Of the total 181,500 were new customers
and 247,600 existing customers.
At the time of its acquisition of AWD, Swiss
Life set aggressive growth targets for its new unit with revenue
forecast to reach €1 billion ($1.3 billion) in 2012.
Things did not get off to a good start in 2008
with AWD reporting an 11.8 percent fall in revenue to €633 million
and net down from €55.2 million in 2007 to €2.1 million. Of total
revenue in 2008 81 percent was derived from life and pension
products.
Overall Swiss Life had a torrid time in 2008,
reporting a net loss on continuing operations of CHF1.143 billion
compared with a net profit of CHF726 million in 2007.
The 2008 net loss included an impairment of
CHF159 million on its MLP stake. At CHF13.3 billion, net earned
premium income in 2008 remained at the 2007 level.
Privately-owned Talanx is active in life and
general primary insurance via multi-branded units including
HDI-Gerling, CiV Versicherungen, PB Versicherungen, Posta Biztosító
and Neue Leben in the life market.
Talanx is also a major player in the life and
non-life reinsurance industry via 50.2 percent owned Hannover
Re.
Figures released by Talanx indicate that it
produced gross premium income of €18.9 billion in 2008, down from
€20.1 billion in 2007, while net investment income fell 42 percent
to €1.6 billion.
No net profit figure is provided. In 2007
Talanx reported a net profit of €999 million before minority
interest deductions and €477 million after these deductions.
In a statement Talanx’s CEO Herbert K Haas
commented that in terms of expected group net income “2008 is a
lost year.”
However, on an upbeat note he added: “Our
insurance business is in great shape and the prospects for the
coming year in key sub-markets are encouraging. We take a relaxed
view of the situation.”
|
TALANX |
|
|
Gross written premium income |
|
|
€bn |
|
|
General insurance |
6 |
|
Life insurance |
5.4 |
|
Non-life reinsurance |
5.6 |
|
Life and health reinsurance |
3.1 |
|
Total |
20.1 |
|
Source: Talanx |
|
