Reinsurance News

DARAG completes transfer of Zurich’s German A&E PI portfolio

1st July 2020 - Author: Luke Gallin

Legacy acquirer DARAG Group Limited has completed the previously announced acquisition of Zurich Insurance’s German architects and engineers (A&E) professional indemnity insurance (PI) portfolio.

darag-logoThe legal transfer of the portfolio to DARAG’s German risk carrier, DARAG Deutsche Versicherungs- und Rückversicherungs-AG, structured initially as an LPT or retrospective reinsurance, has now received approval from the Irish High Court, and regulatory approval from the CBI in Ireland and BaFin in Germany.

The arrangement was first announced in September of 2019, and sees DARAG’s German risk carrier assume reserves of over €180 million.

The German office of insurance and reinsurance outsourcing and consulting specialist, Pro Global Holdings Limited (Pro), has been appointed by DARAG as claims administrator to manage the A&E PI policies with DARAG’s oversight.

The Chief Executive Officer (CEO) of DARAG, Tom Booth, said: “DARAG is expanding globally, with an active transaction pipeline in a number of territories, including in our core markets like Germany. Zurich’s German architects and engineers professional indemnity book is a great match for DARAG’s existing business and the timely completion of this transfer and the transition of the claims handling to PRO, despite the COVID-19 pandemic, is testimony to our operational capabilities and financial strength.


“The seamless transaction has been a joint effort between DARAG, PRO and the expert Zurich legacy team. It has been a pleasure to work with Zurich and PRO in the course of the past few months. We are very pleased to announce the completion of this transaction with Zurich and we look forward to announcing further deals in the near future.”

This arrangement marks the second time that Pro has been selected as claims administrator on a significant German legacy portfolio, following the transfer of Zurich’s former legacy medical malpractice book of business in 2017.

According to Pro, the German A&E PI is reserved at roughly €200 million and represents one of the largest P&C run-off transactions in Germany.

Pro Head of Germany, Robert Buchberger, commented: “This is the second significant German legacy portfolio bid we have successfully won as claims administrator, and our use of technology to automate and consolidate manual claims processes together with a highly focused team of experts is the key to our success.

“Using technology this way increases the valuable time our experienced claims handlers can spend supporting policyholders and improving the claimant experience, whilst reducing operational costs. I’m particularly proud that we have completed the operational transfer during these challenging times. After a competitive bid to become the trusted claims administrator for this portfolio, we faced the prospect of assembling and training a team of 12 dedicated professionals at a time of ongoing upheaval and crisis.

“All this stands us in good stead to further serve the German re/insurance claims market in the coming years both in run-off and live-portfolios.”

Pro Project Manager, Preeti Bansil, said: “I’m proud to be involved in this significant project, which is a testament to collaborative cross-border success. The operational transfer strategy saw a focused collaboration of legal entities –  Zurich, DARAG and Pro – working together in a stretched environment, and still achieving the timelines promised with the best and most efficient solutions.

“The transfer itself saw the integration of at least three major IT systems into Pelican, together with thousands of physical files and a vast volume of claims data, moving to a fully paperless claims handling.

“The result is an improved operating model, reduced reliance upon ancillary systems to manage and settle claims – and faster claims settlements as well.”

While DARAG’s Chief Operating Officer (COO), Andrew Hill, added: “Having identified Pro as our preferred partner to handle the claims administration for the German A&E PI portfolio during the transaction process, it was crucial to DARAG that the operational migration was subsequently delivered in a timely and efficient manner.

“The fact this has been achieved despite notable disruption to the working environment in recent months is testament to the resilience of the parties’ operating models and to the dedication and collaboration shown by team members from DARAG, Pro and Zurich.

“We look forward to partnering with Pro on future opportunities as DARAG continues its growth as a global legacy carrier.”

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