Italy’s Generali has agreed to sell its Belgian operations to Athora Holding Ltd. for approximately $668.3 million) in cash. The transaction is expected to close in the second half of 2018, subject to regulatory approvals.
Generali Belgium S.A. provides insurance products and services to 420,000 retail and corporate clients through a network of over 1,000 independent brokers. Its products include single and recurring premium savings; pension and unit-linked life products; motor, homeowners and renters non-life coverage. As the 11th largest insurer in Belgium, the company had gross written premiums of more than $792.1 million in 2017, and total assets of $6.6 billion.
Generali said the sale of its life segment-focused subsidiary is part of its ongoing strategy to focus and rationalize its core operations as well as to improve its operational efficiency and capital allocation. Athora, through its subsidiaries, provides acquisition, portfolio transfer and reinsurance solutions to enable insurers to free up capital, management capacities and operating resources.
“Since our successful capital raise in April 2017, we have been rapidly expanding our presence in Europe,” said Michele Bareggi, group managing partner at Athora. “In addition to launching our business with the acquisitions of Delta Lloyd Lebensversicherung in 2015 and Aegon Ireland earlier this month, this transaction is another major step toward our goal of becoming the premier European insurance consolidator and life reinsurance partner.”
“This deal underlines our continuing efforts to optimize [Generali’s] international reach across the world,” said Frédéric de Courtois, Group CEO Global Business Lines & International.
“After having announced the sale of our operations in Guatemala, Panama, Colombia, the Netherlands and Ireland, this transaction represents yet another important step ahead in our strategy,” he continued.
The total value of all the deals that have been concluded and those already announced, but still subject to regulatory approvals, is over $1.4 billion, which de Courtois said, exceeds Generali’s initial target of $1.2 billion.
The transaction is expected to have a positive impact on Generali’s solvency position by adding approximately 2.6 percentage points to its regulatory Solvency II ratio. The sale is also expected to generate a capital gain at group level of approximately $185.6 million, which will be booked on closing.
Generali said it will remain present in Belgium continuing to provide insurance and assistance solutions through its Global Business Lines as well as through its Europ Assistance operations.
Bareggi noted that Belgium is one of Athora’s target markets where it plans “to deploy substantial capital over the next few years.” He said Generali Belgium fits wells with the company’s strategy and growth plans for the country.
“We see tremendous opportunities within Belgium to assist insurers in addressing challenges in their businesses through our share capital and reinsurance solutions,” Bareggi commented.
The acquisition of Generali Belgium is Athora’s first purchase of a non-life business, athough Althora’s strategic partner and investor, Apollo Global Management LLC, has made several non-life investments, including Tranquilidade (Portugal), Amissima (Italy), and Catalina Holdings (Americas and Europe).
Bermuda-based Athora Holding’s principal operational subsidiaries are Athene Lebensversicherung AG, located in Wiesbaden, Germany; Aegon Ireland plc, located in Dublin, and Athora Life Re, a Bermuda-domiciled reinsurer. Athora group has over 400 employees, 300,000 policyholders, and total consolidated assets of approximately $12.4 billion.