DARAG has agreed to acquire Zurich’s German architects and engineers professional indemnity insurance portfolio
German insurance and reinsurance company DARAG Group has signed an agreement with Zurich Insurance to acquire the latter’s German architects and engineers (A&E) professional indemnity insurance portfolio.
DARAG said that the deal will be executed in two steps. The company will initially provide Zurich with economic finality through a Loss Portfolio Transfer (LPT), by which the portfolio will be economically transferred to DARAG.
After the completion of the first step, the two companies will apply for an Irish Section 13 Insurance Business Transfer (IBT) to complete the transaction legally.
DARAG will assume the £161m reserves of A&E after the deal is closed
Subject to regulatory and court approvals, DARAG Deutsche Versicherungs- und Rückversicherungs, the company’s German risk carrier, will assume reserves of more than €180m (£161m).
DARAG Group CEO Tom Booth said: “This significant transaction in our core German market demonstrates the capabilities of DARAG today. Earlier this year, we completed a significant capital upscaling of our business, enabling DARAG to transact large portfolios and tailor our offering to the needs of the most sophisticated carriers in the insurance market.
“The deal with Zurich follows a number of recently announced transactions for DARAG as we continue the strategic expansion of our business.
“The professionalism and expertise of the Zurich team meant we were able to reach agreement quickly and efficiently, providing economic, legal and operational finality to Zurich and security to insureds. I am therefore very pleased to announce reaching agreement on this transaction.”
Last month, DARAG signed a portfolio transfer agreement with SCHWARZMEER UND OSTSEE Versicherungsaktiengesellschaft (SOVAG), a German re/insurer, for the transfer of legacy portfolio to its Deutsche Versicherungs- und Ruckversicherungs, subject to regulatory approval from BaFin.
The insurance business includes several speciality lines such as liability, property, transport and motor, with clients in Germany, Spain, Malta, Belgium, the Netherlands and Austria. The inwards reinsurance portfolio includes European and international business, underwritten by SOVAG’s UK branch, and German risks underwritten by its Hamburg office.