NN Life & Pensions has signed a €253mdeal to take over the life insurance arm of ABN AMRO Verzekeringen (AAV), a joint venture (JV) between NN Group and ABN AMRO Bank.
The deal will see NN Life & Pensions purchasing 100% of ABN AMRO Levensverzekering N.V. (AAL) from AAV.
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It will be funded using NN Life & Pensions’s current cash reserves, with the proceeds to be distributed to NN Group and ABN AMRO Bank shareholders.
AAV will focus on its non-life-insurance business as well as insurance-broker activities upon deal completion in the second half of this year.
The transaction, which awaits regulatory nod, will not affect services and guarantees to clients, NN Group stated.
NN Life & Pensions and ABN AMRO Bank will continue selling term life offerings through the bank’s channels.
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By GlobalDataAccording to NN Group, the deal will have a limited negative impact on its Solvency II ratio on completion.
The group expects this to convert into a limited positive impact after the merger of AAL and NN Life & Pensions and the application of its Partial Internal Model.
Net cash outflow from NN Group is expected to be €128m following the purchase, with dividend capacity projected to grow nearly €15m per year.
NN Group CEO for Netherlands Life & Pensions and management board member Leon van Riet said: ‘This transaction is in line with our strategy to achieve further efficiencies by leveraging our existing closed book capabilities.
“We are pleased to continue our successful collaboration with ABN AMRO Bank and look forward to further supporting AAV’s growth strategy in non-life insurance.’
AAV serves more than one million retail and corporate customers.
ABN AMRO Bank owns a 49% interest in AAV, with NN Group owning a majority stake of 51%.
Furthermore, ABN AMRO Bank and NN Group have reached an agreement to extend their cooperation in AAV by five years to 2038. This is subject to the fulfilment of certain performance metrics. They also intend to make further investments to bolster digital capabilities of AAV and its non-life book.
