German insurer Frankfurter Leben-Gruppe (Frankfurt Leben) has bought the €3bn multi-employer Pro bAV Pensionskasse from AXA Germany.
No purchasing price was disclosed but both companies emphasised in press releases that the 260,000 contracts would be transferred without changes to guarantees or benefits.
“Changes in the market and the regulatory framework have considerably slowed down new business and also led to shrinking membership numbers in the Pro bAV Pensionskassen,” AXA said in a statement.
The company said it wanted to focus on other offerings in the occupational pension sector, such as direct insurance contracts and reinsurance.
AXA also said the sale would help the Pro bAV Pensionskasse avoid having to raise costs for members.
“Given its fundamentally different business model the Frankfurt Leben group can achieve a lower cost level for its clients,” AXA said.
In Germany, Pensionskassen are insurance-based vehicles that are subject to similar regulations and maximum guarantee rates as insurers. The regulatory regime of Solvency II does not apply to them, however.
In a statement, Frankfurt Leben confirmed it would offer “considerably reduced costs” and keep this level “over the long term”.
The deal is subject to approval by BaFin, Germany’s financial regulator.
The insurer was founded in 2015 to take over life insurance assets of German insurer Basler Versicherungen.
Last year Frankfurt Leben bought another life insurance company, ARAG München, raising its assets to just over €5bn.
So-called ‘run-off’ sales have led to an often heated political debate in Germany. Such deals involve insurers selling off life insurance contracts that have become more expensive and less attractive to handle in the low interest rate environment.
The conservative CDU party had considered a legal provision obligating insurers to get clients’ consent before selling life insurance contracts.
All debates have been put on hold during ongoing coalition talks as chancellor Angela Merkel attempts to form a new government.