Hannover Re To Incorporate As European Company Ahead Of Solvency II
14 Marzo 2012 - 8:55AM
Noticias Dow Jones
Germany's Hannover Re AG (HNR1.XE), one of the three largest
reinsurers worldwide, Wednesday said it is transforming its legal
form into a European public limited company, or Societas Europaea,
to keep all options open in Europe's future new regulatory
environment.
Solvency II, which the European Union plans to introduce Jan. 1,
2013, with a one-year transition period ahead of full enforcement,
will set tougher requirements on insurers operating in the EU
regarding capital management, risk management, reporting and other
issues.
Hannover Re said the plans to become a Societas Europaea, SE,
which will be completed by early next year, reflect the
international character of its business and its workforce. It also
enables Hannover Re to relocate headquarters within the EU.
It is currently incorporated as an Aktiengesellschaft, or AG,
which is the traditional term identifying publicly listed companies
in Germany, similar to SA in France or SpA in Italy.
Chief Executive Ulrich Wallin told the annual news conference
that potential plans to relocate the Hannover-based company abroad
aren't related to any tax or labor representation considerations,
but are related to current Solvency II talks with regulators.
A key issue for insurers and reinsurers in the new regulatory
environment will be how much money they must set aside to back the
risks they take on their books while ensuring they are solvent even
in crisis scenarios.
Large European players--hoping that regulators will accept
diversification within their group as a reason to demand less
capital be set aside--are negotiating with regulators acceptance of
so-called "internal models" for the matching of capital, solvency
and risk. Smaller insurers are expected to use a so-called
"standard model" developed by the EU, which doesn't account for
diversification benefits and will likely demand more capital as a
backup.
"It is relatively important to get our internal model approved,
in order to be able to calculate and steer solvency on a group
level," Wallin said. He added that it is unclear whether Hannover
Re, which is 50.2% owned by Germany's Talanx AG insurance group,
would be able to get its own internal risk model approved in
Germany, in addition to parent Talanx getting its own internal
model approved.
A relocation of Hannover Re to a different EU jurisdiction than
the parent would certainly make it easier to get its own internal
risk model approved, Wallin said.
"If we can get the approval of the internal model easier or
faster outside Germany, it would be a disadvantage to stay," Wallin
said. "It would, however, have to be a substantial advantage, due
to the expenses involved."
Hannover Re is currently discussing the internal risk model with
the German insurance regulator, BaFin, along with Irish and U.K.
regulators, as the reinsurer is also represented there.
Though talks with the German regulator are at an advanced stage,
the approval isn't there yet, Wallin said, though he hopes to get
it by the end of 2012. He added that there aren't currently any
concrete plans to move headquarters, overall the potential
relocation plans currently have a likelihood of about 20%-30%.
In recent years, a number of European insurers--such as Allianz
SE (ALV.XE) and Scor SE (SCR.FR)--and many companies in other
sectors--such as Porsche Holding SE (PAH3.XE), MAN SE (MAN.XE) and
BASF SE (BAS.XE)--have transformed into the SE incorporation. It
isn't yet clear whether other insurers have similar plans.
- By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500;
ulrike.dauer@dowjones.com
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