by Sue Allen
The Australian arm of German-based reinsurers Gerlings has closed its books to new life business and going into run off in the Australian and New Zealand markets.
Its parent company has also stopped taking on fire and general reinsurance globally.
The news will have come as no surprise to those keeping an eye on Gerlings’ head office operations during the last year.
In March 2001, it estimated that its group of companies would end the business year with a deficit of Euro 500 million (NZ$984 million). At which time Gerlings promised shareholders it would "restructure portfolios" and "embark on a new strategic course."
In August, Gerlings announced its US reinsurance subsidiary was not writing any new business and the company was working on repositioning itself as "an international reinsurer with a European focus".
For a brief time there was talk of a sale of Gerlings life reinsurance, and the bulk of its third party non-life reinsurance accounts, to the French SCOR Group, but those soon ended.
After talks with SCOR ended, the company’s Standard and Poors rating was also affected.
Then, in October, came the announcement from the company’s German head office that no further life reinsurance would be written by Gerlings, but a new company – Gerlings Life Reinsurance GmbH - would take on life reinsurance business.
The fact that the company has now decided to close its books to new life re-insurance business in Australia and New Zealand should, therefore, come as no surprise.
Club Life chief executive Naomi Ballantyne, who says a small percentage of their portfolio was reinsured with Gerlings’ Australia, says she is unconcerned by the announcement.
Under Club Life’s treaty agreement, Gerlings German parent company has agreed to pick up the business and cover it into run off.
Meanwhile, QBE has signed a letter of intent to purchase Gerlings Australian general insurance portfolio.
Ballantyne says she is not surprised by the news because reinsurers everywhere are reeling from the hits taken in fire and general.
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