MUNICH/FRANKFURT 鈥斅燘ritain鈥檚 Resolution Group, Swiss Re and private equity firm Cinven have expressed an interest in acquiring two large German life insurance portfolios owned by Ergo and Generali, sources familiar with the matter said on Monday.

Munich Re鈥檚 primary insurance affiliate Ergo and the German subsidiary of Italy鈥檚 Generali are considering the sale of their respective portfolios of 6 million and 4 million policies in run-off.

A spokeswoman for Ergo said the company had yet to decide whether to sell the portfolio but would do so soon.

Swiss Re and Cinven declined to comment, while Resolution was not immediately available to comment.

Cinven has indicated that it is willing to inject money into its life insurance and pensions group Viridium 鈥斅爋wned by Cinven and Hannover Re 鈥斅爐o acquire the German portfolios.

Ergo and fellow insurers are struggling to pay guaranteed returns to clients because of record-low interest rates. Combined with more stringent European capital rules, these have prompted some to offload some life insurance operations.

Financial services groups specializing in the run-off of life insurance policies are vying for these portfolios. They acquire policies until their expiry and aim to turn a profit by measures such as cutting administrative costs.

Ergo鈥檚 run-off life portfolio has assets of 鈧56 billion ($65 billion), while Generali鈥檚 is around 鈧40 billion.

The sales of the Ergo and the Generali portfolios would mark the largest ever sale of closed books. Dutch insurer Aegon sold a 9 billion pounds ($12 billion) book of closed UK life business last year and Britain鈥檚 Standard Life has said it is open to the sale of its 16 billion-pound closed annuity portfolio.

The German financial watchdog will have to approve any sale, which would depend on the solvency of the future owner.

鈥淭he hurdle will continue to be very high,鈥 said a person in the industry. 鈥淚t is unlikely that anything will happen quickly.鈥 鈥 Reuters

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