Insurer ASR has taken over De Eendragt, the life insurer for collective pension arrangements.
In a joint statement with the €1.7bn De Eendragt, ASR said it wanted to fully integrate the small life insurer into its own organisation over time.
“Last year, we became increasingly aware that joining a larger player would offer our affiliated employers and participants the best options for continuity,” a spokeswoman for ASR quoted Albert Bakker, director of De Eendragt, as saying.
He added that the life insurer’s solvency “would soon meet all legal requirements again”.
Until ten years ago, De Eendragt was the pension fund for the companies of former paper manufacturer Koninklijke Van Gelder Papier. However, it was forced to change its approach after supervisor DNB concluded its business model of managing assets in ring-fenced accounts was at odds with the then-new Pension Act.
Currently, the life insurer has 37 affiliated employers with a total of 22,000 participants.
In an interview in IPE sister publication PensioenPro last year, Philip Menco, De Eendragt’s former director, indicated that the company was suffering under the stricter accounting rules of Solvency II, which required a much larger contribution from new clients to the insurer’s financial buffers.
As a result, De Eendragt was no longer able to compete and failed to attract new clients, he said.
In addition, the increasing supervisory burden as well as falling interest rates also affected the life insurer, according to Menco, who said that it had been looking into the options for improving its buffers through co-operation with other players since 2010.
However, in its annual report for 2013, De Eendragt’s board said that it had decided to continue independently, “since a strategic survey into co-operation had not produced a satisfactory result”.
According both parties, the takeover is subject to approval from the regulators. ASR and De Eendragt did not disclose the cost of the transaction.
Jos Baeten, chief executive officer at ASR, said that the acquisition of De Eendragt was an important step in realising ASR’s goal of gaining a bigger foothold in the Dutch pensions market.
Last year, ASR increased its pension liabilities by €140m through the extension of contracts, new contracts with largely employers in the SME sector as well as through buyouts of pension funds.
In its annual report it also said that the 50% ASR-owned Brand New Day PPI, which focuses on DC plans, doubled its number of client employers to 1,000.