June 7, 2019 / 6:54 AM / a month ago

Athora, NN Group buy Dutch insurer Vivat's operations

AMSTERDAM (Reuters) - Dutch insurer Vivat said on Friday it had agreed to a buyout deal with private life insurer Athora.

Terms of the deal were not disclosed but the Netherlands’ NN Group said it would buy Vivat’s smaller damage subsidiary for 416 million euros ($469 million).

Chinese owner Anbang put Vivat, one of the largest insurance companies in the Netherlands, up for sale last year. It drew bids from other large Dutch insurers Aegon and ASR.

Anbang acquired Vivat in 2015 for one euro — and an equity injection of 1.35 billion euros to shore up the company’s balance sheet.

The deal will help Bermuda-based Athora continue its growth as a European focused insurer and re-insurer after its acquisition of Delta Lloyd’s German business in 2014, Aegon’s Irish businesses and Generali’s Belgian operations.

Spun out of Athena in 2018, Ahtora buys up assets that may be non-core to their owners in order to manage them more efficiently.

“Vivat’s strong presence, including its compelling brand portfolio, will become a significant part of our European operations,” Ahtora CEO Michele Bareggi said.

Vivat also operates Zwitzerleven, a pension insurance insurer, and ACTIAM, an asset manager, both well-known brands in the Dutch market.

NN Group will also buy a portfolio of loans from Vivat Holding for 150 million euros, NN Group said.

NN, the Netherlands’ largest insurer, said the acquisition of the damage activities “will further strengthen NN Group’s leading Non-life platform in the Netherlands” and estimated the investment would add annual free cash flow of 50 million euros by 2022.

For Anbang, the sale of Vivat is part of a wider retreat after its chairman Wu Xiaohui was arrested in 2017 and later convicted for fraud.

Insurers are struggling to pay guaranteed returns because of record-low interest rates and European capital rules that have become more stringent for some life policies.

That has prompted some insurers to cease issuing new life insurance policies and honouring existing policies in a “run-off” process. Firms specialising in buying up these so-called “back books” benefit from economies of scale in managing such portfolios.

In Europe’s largest deal, Italy’s Generali last year sold its German back book portfolio.

Reporting by Bart Meijer and Toby Sterling; additional reporting by Aro Schuetze; editing by Subhranshu Sahu and Jason Neely

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