Gossmann & Cie. acquires German insurer SOVAG

Gossmann & Cie. has acquired Schwarzmeer- und Ostseeversicherungs (SOVAG) via its holding company Minerva Capital. Sellers were Gazprom Germania, Insurance Company of Gaz Industry (SOGAZ) and VOLGA Resources Investments.

The transaction follows the completion of the transfer of SOVAG’s legacy portfolio to DARAG on December 19 2019. The financial terms of the transaction, which was closed on December 30 2019, were not disclosed.

The incorporation of SOVAG’s team and established insurance operations will accelerate Gossmann & Cie.’s portfolio refinement capabilities via ExPRO (Expiring Policy Roll-Over), a product for the ongoing optimisation of equity capital for non-life insurers.

All resources, including the team and major parts of the infrastructure, will be contributed to Gossmann & Cie.’s new risk carrier, a protected cell company (PCC), in the process of being licensed by the Maltese regulators shortly. Going forward, SOVAG will cease operations as a risk carrier, as it has returned its license after the transaction.

“The acquisition of SOVAG marks a significant milestone towards delivering holistic and data-intuitive portfolio refinement solutions across Europe, at a time of increased interest and demand, just months after launching ExPRO,” said Arndt Gossmann, founder of Gossmann & Cie. “We bring onboard a great team of experienced insurance specialists, as well as very sustainable infrastructure and IT systems.

“The SOVAG hub will become the operational backbone of our new carrier, enabling us to introduce and scale our ongoing capital optimization offering in eight EU countries within the first quarter of 2020.”

Gossmann & Cie. launched ExPRO in 2019 in a partnership with Munich Re. It allows the continuous transfer of individual insurance contracts that have expired, or are due to expire in the near future, to an external risk carrier. This enables the ceding insurer to release capital and operational resources, tied up by former customers, immediately after the termination of the policies. Munich Re will take over the majority of risks as reinsurer.

Gossmann & Cie. was advised by Görg Partnerschaft von Rechtsanwälten (M&A) and Norton Rose Fulbright (regulatory advice). The sellers were advised by Clifford Chance.