Gossmann & Cie. has announced that it plans to purchase German re/insurer Schwarzmeer- und Ostseeversicherungs-AG (SOVAG) via its holding company Minerva Capital GmbH.
The transaction follows the completion of the transfer of SOVAG’s legacy portfolio to DARAG in December 2019.
Gossmann & Cie. expects the acquisition to accelerate its portfolio refinement capabilities via ExPRO (Expiring Policy Roll-Over), a product that helps to optimise equity capital for non-life insurers.
All resources, including the team and major parts of the infrastructure, will be contributed to a Gossmann & Cie. Protected Cell Company (PCC), which is in the process of being licensed in Malta.
SOVAG will return its licence after the transaction and cease all operations as a risk carrier.
“The acquisition of SOVAG marks a significant milestone towards delivering holistic and data-intuitive portfolio refinement solutions across Europe, at a time of increased interest and demand, just months after launching ExPRO,” said Arndt Gossmann, founder of Gossmann & Cie..
“We bring onboard a great team of experienced insurance specialists, as well as very sustainable infrastructure and IT systems,” he continued.
“The SOVAG hub will become the operational backbone of our new carrier, enabling us to introduce and scale our ongoing capital optimization offering in eight EU countries within the first quarter of 2020.”
Launched last year in partnership with Munich Re, ExPRO allows for the continuous transfer of individual insurance contracts that have expired, or are due to expire, to an external risk carrier.
The idea is to enable the ceding insurer to release capital and operational resources, tied up by former customers, immediately after the termination of the policies. Munich Re will take over the majority of risks as reinsurer.
Gossmann & Cie. was advised on this transaction by Görg Partnerschaft von Rechtsanwälten (M&A) and Norton Rose Fulbright LLP (Regulatory Advice).
The sellers consisted of Gazprom Germania GmbH, Insurance Company of Gaz Industry (SOGAZ) and VOLGA Resources Investments, and were advised by Clifford Chance LLP.
