AXA to offload closed German life and pensions portfolio to Athora

French insurance giant AXA said that its German subsidiary — AXA Germany has agreed to divest a portfolio of €16 billion of life and pensions insurance reserves in Germany to Athora Deutschland (Athora Germany), a subsidiary of retirement services group Athora.

As per the terms of the deal, AXA Germany will offload the portfolio to the licensed insurer in Germany for €660 million.

Since 2013, the portfolio involved in the deal has been closed to new business. It is primarily made up of traditional savings policies that have an average guaranteed rate of 3.2%.

As part of the deal, AXA’s subsidiary — Axa Investment Managers (Axa IM) will sign an agreement to deliver asset management services to Athora Germany until 2028.

Frédéric de Courtois — AXA Group Deputy CEO said: “The sale of this portfolio marks an important milestone in the journey to optimize our Life & Savings in-force portfolios across the Group.

“Upon completion of this transaction, we will have secured Euro 24 billion out of the Euro 30-50 billion target reduction in traditional G/A reserves that we set for the Group. We are pleased with this transaction that will further improve the Group’s risk profile and enhance our cash position.”

AXA to sell closed German life and pensions portfolio to Athora for €660 million. Photo courtesy of JoachimKohler-HB/Wikimedia Commons.

For Athora, the deal aligns with its growth strategy, which is concentrated on conventional guaranteed savings and pension products in Europe.

Michele Bareggi — Athora Group CEO said: “We have been strategically building Athora’s presence across Europe and are excited about the opportunity this deal provides for our growth in Germany. This highlights our position as a preferred solutions provider because of our robust capital position, deep expertise in the retirement services industry and proven track record of executing transactions to deliver value to counter-parties.

“We have a strong reputation for managing guaranteed savings portfolios in Germany – with significant emphasis placed on prudent investment, risk and capital management – and we intend to play a long-term role in meeting customer demand for these products in this important European market.”

The deal, which is subject to regulatory approvals and other conditions, is likely to close in Q4 2023.