AXA Liabilities Managers is to acquire non-life run-off company BF Rückversicherung from the German states of Berlin and Brandenburg. BF Rück is the former reinsurance arm of German state-owned Feuersozietät.

After the sale and the transfer of the direct insurance business at the end of 2003, BF Rück continued to be a public-law institution owned by the states of Berlin and Brandenburg. BF Rück then ceased writing new business and was put into run-off. The company wrote reinsurance of aviation, property and satellite risks. Its gross reserves total close to EUR 70 million.

This is the first external acquisition by AXA LM which was set up in 2001 to proactively manage AXA’s non-life reinsurance liabilities. AXA LM says this transaction confirms its strategic focus on accelerating finality for portfolios currently managed and the acquisition of new portfolios, which the company initiated in 2008.

‘The operational track record and platform we have built over the years enable us to seize growth opportunities outside AXA today,’ says Cédric de Linares, president and CEO of AXA LM. ‘As one of the leaders in our industry, we are happy to bring our expertise and distinct value proposition to the market.

‘BF Rückversicherung, which is made up of 100 per cent non-life reinsurance liabilities, is a perfect fit with our core business and strategy,’ adds de Linares.

‘We plan to use our tried and tested proactive approach to manage this new portfolio: a combination of value generation and professionalism which has been successful for us and for AXA since 2001.’

Rolf Urselmann, CEO of BF Rückversicherung, comments: ‘Seeing that BF Rückversicherung’s activity had been stabilised over the last years, the states of Berlin and Brandenburg decided to look for a partner who could provide full closure on the business and manage the portfolio with utmost professionalism. AXA LM provided solutions aligned with both these objectives.’

The transaction is subject to approval by the Berlin senate, the Berlin parliament, and the German insurance regulator BaFin. In parallel, BF Rückversicherung will be transformed into a stock company. It is expected that the transaction will close in spring 2010.