Despite notice in late October by Gerling Konzern that its global property and casualty reinsurance interests under Gerling Globale Ruck (GGR) will cease to write new business with the intent of winding up operations, hopes remain high that a buyer will be found to acquire the Canadian unit of Gerling Global Reinsurance Co.
The Cologne-based Gerling group recently announced that it will cease writing new non-life related business, with its GGR operations to focus on fulfilling existing contracts valued globally at about I4.5 billion. This announcement follows on news that talks between Gerling and French reinsurer Scor to acquire interests held by GGR had fallen through. Failing to find a buyer, Gerling indicated that it would wind down its GGR operations.
Although the “Gerling group” is no longer in the future picture for the Canadian Gerling Global Re Co., there is a strong likelihood that the local operation will be purchased intact before the end of this year, says president John Kartechner. The Canadian operation holds a book of business valued at about $140 million.
Kartechner says discussions have been entered into with several interested parties, with six confidentiality contracts signed. He expects finalization of a deal soon, with the view of transferring the business by the end of the year. “We feel extremely confident that we will find a solution. The Canadian [Gerling] company is too good a book of business not to attract interest. It’s just a pity that that we couldn’t have gone this route sooner, before entering into the Scor discussions, they simply couldn’t afford to buy us [Gerling group], and we lost a lot of time.”
Kartechner dispelled rumors in the media that the Gerling group head-office had rejected individual solutions sought by local operations. “Like us, the Gerling operations in Australia and South Africa are looking at potential buyers. However, my only concern is to find a Canadian solution,” says Kartechner. Meetings have been held with clients and reinsurance brokers to apprise them of the situation, he adds, and support for the company remains strong.
Kartechner says a final deal, which would still be subject to regulatory approval, will likely be on a turnkey basis, in other words, the operation will be purchased in full. “So there will be no change in operations, everyone [staff] will stay.” He adds that, “we’re pleased with the amount of interest that has been expressed”. Although not willing to disclose the identity of the suitors, Kartechner says most of the discussions taking place are with companies that have international reinsurance interest.