A last minute attempt to find a buyer for the Canadian reinsurance operation of Gerling Globale Ruck (GGR) fell apart at the end of last year, confirms local group president John Kartechner. Global parent Gerling Konzern announced in late October of last year that its reinsurance interests under financially troubled GGR would cease to write new business. Local units, from Canada to Australia and South Africa, began looking for alternative, independent buyers with the end of the year being the final deadline to strike a deal. None of the Gerling Re operations were able to find a buyer in time, confirms Kartechner. As a result, the group’s property and casualty reinsurance business has officially gone into run-off, with the Canadian unit’s final business expiring by 2004, he adds.
Kartechner says serious buyer discussions had been ongoing with at least one unnamed entity operating in the p&c insurance industry until almost the end of last year. In the end, the potential buyer’s parent head-office held a special board of directors meeting where it was decided not to proceed with the deal, he adds. “Naturally, we were really disappointed, and so was the local party we had been negotiating with. If it [the deal] had happened, it would have been a unique and exciting opportunity for Canada.”
Kartechner notes that eight confidentiality agreements had been entered into with potential buyers of the Gerling Canadian operation – which currently holds about $140 million in business. Of these, two showed serious interest in acquiring the entire legal entity of the Canadian operation, he adds, while one other was looking at buying out the business portfolio. “It’s truly a shame that no one will pick up this business.” While the company is in run-off, Kartechner says, “there’s still jobs available”. Staff cutbacks have not yet been decided on as yet, he adds, “this is something that we will look at in the new year”.