Generali seeks buyer for $50 billion portfolio - sources

Unit said to be “more exposed to the low interest rates risk”

Generali seeks buyer for $50 billion portfolio - sources

Insurance News

By Terry Gangcuangco

Generali Leben, Generali’s $50 billion German life insurance unit, is reportedly being sold amid the Italian insurer’s European restructure.

However, according to sources cited by Reuters, Generali Leben’s complexity, as well as the required regulatory approval, means a deal is not likely to close soon. They added Generali might not sell the German unit after all if no good offer comes along.

Meanwhile, a Generali spokesperson said a sale of certain portfolios within the German perimeter could be just one of several strategic options it could evaluate.

The report noted the struggle faced by Generali and other insurance providers in paying guaranteed returns to policyholders with interest rates being at their lowest. Citing the added effect of new capital rules, it said some insurers have been forced to let go of life insurance operations.

“Among the three big life business units of the group (AachenMuenchner, Cosmosdirekt, and Generali Leben) Generali Leben is more exposed to the low interest rates risk,” said the Generali spokesperson, as quoted by the report.

Generali had previously said it would exit less profitable markets.

“Our goal is leadership in our chosen markets, not measured by size but by profitability. We will further improve our operating performance and will create long-term value,” said Generali Group CEO Philippe Donnet late last year.

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