Cinven Considers Sale of German Life Insurer Viridium Amidst Customer Outflows

Private equity firm Cinven is reportedly exploring the possibility of selling German life insurer Viridium, following customer outflows experienced by another insurance investment, Eurovita. Cinven, in collaboration with advisers from Fenchurch Advisory and Goldman Sachs, is said to be assessing interest in Viridium, which specializes in purchasing old books of policies from other insurers.

The potential sale is expected to commence once German regulator BaFin completes its review of Viridium’s planned portfolio acquisition. Cinven currently holds a majority stake in Viridium, while Hannover Re and Assicurazioni Generali have minority stakes. It remains uncertain whether the minority investors would participate in a potential transaction.

Although discussions are still in the preliminary stages, the plans may be subject to alterations or abandonment, cautioned sources familiar with the matter. BaFin, Cinven, Generali, Goldman Sachs, Hannover Re, and Viridium declined to comment, while Fenchurch Advisory did not immediately respond to requests for comment.

Viridium, formerly a part of Lloyds Banking Group, manages assets worth €65 billion and oversees 3.6 million policies. In 2021, the company had a book value exceeding €1 billion. However, its acquisition of €21 billion worth of assets from Zurich Insurance Group, announced in June 2022, is currently under review by BaFin, with indications suggesting that the regulator may block the deal.

Viridium faced complications due to the collapse of Eurovita, prompting Italy’s insurance supervisor IVASS to orchestrate a rescue operation. To prevent a disorderly liquidation of Eurovita, Cinven recently agreed to repurchase €160 million of the Italian company’s debt.

Shares in Generali and Hannover Re experienced slight gains on Tuesday morning. The outcome of the potential sale of Viridium will likely have implications for the insurance industry in Germany and beyond.