German mutual insurers slow on mergers-Gothaer
COLOGNE, Germany, May 28 (Reuters) - Mergers among Germany's non-listed insurance companies will be slow in coming, though parallel tie-ups among their banking partners might spur action, a board member at mutual insurer Gothaer said on Wednesday.
"It's as difficult as ever," said Juergen Meisch, whose company and Switzerland's Baloise (BALN.VX) called off merger talks earlier this year, just two weeks after they were announced. Baloise said the two companies could not agree on commercial terms.
A merger of the two would have created a top-10 insurer in Germany with annual premium volume of around 9.1 billion euros ($14.3 billion) and might have heralded broader consolidation.
The global credit crisis, which prompted billions of euros of writedowns at some German state-sector banks and rekindled merger efforts among them, may spur consolidation among insurers linked to those banks, Meisch said.
"I wouldn't be surprised if state-sector insurers were used as bargaining chips," he said.
But concerns about job losses, office closures and conflicts of personalities were hampering tie-ups among the country's mutual insurers, Meisch said at an insurance conference at Cologne University of Applied Sciences.
"It won't be the credit crisis (that spurs mergers) but perhaps it will be Solvency II," he said, referring to new risk capital management rules due to come into effect in 2012 that are expected to drive many insurers to merge.
Germany's non-listed insurers in recent years have changed their articles of incorporation to allow easier tie-ups, but so far there has been little movement. (Reporting by Jonathan Gould; Editing by Paul Bolding)
