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Baloise and SIGNAL IDUNA Group sign contract on realignment of Deutscher Ring

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Germany is a core market for Baloise, where the Group is aiming to grow faster than the market. The organisation matrix of the German subsidiaries – Deutscher Ring Lebensversicherungs-AG (DR Leben) and Deutscher Ring Sachversicherungs-AG (DR Sach) in Hamburg and Basler Versicherungen in Bad Homburg – was inefficient and therefore unsuitable for attaining these growth objectives. Thus in November 2008, all German business units were put under the same management to link them more closely. Previously, DR Leben/Sach and Deutscher Ring Krankenversicherungsverein a.G. (DR Kranken) – which as an independent insurance company is not part of Baloise – were controlled by the same executive committee.

Following the establishment of a uniform management board, representatives of the Baloise German subsidiaries conducted a detailed assessment of the current situation. In March 2009, the resulting measures were presented, which aim at linking the German units more closely. In particular, the position of the Sales units is to be strengthened and the companies’ efficiency enhanced by establishing competence centres at the primary locations in Hamburg and Bad Homburg. Baloise anticipates synergy effects from the closer networking in the amount of 20 - 25 million euros annually as of 2012.

In April 2009, DR Kranken merged with the Signal Iduna Group to become a horizontally organised group sharing the same executive board members. Signal Iduna is a direct competitor of both DR Leben and DR Sach. The resulting combine contravened insurance supervision law as well as competition law. The German Federal Cartel office in November 2009 and the Federal Financial Supervisory Authority (BaFin) in February 2010 therefore warned that the Deutscher Ring companies had to be separated.

In March 2010, DR Leben/Sach and DR Kranken mutually agreed to terminate the organisational agreement between the Deutscher Ring companies that had existed until then and thereafter engaged in negotiations on amicable separation. In April, the parties agreed on a letter of intent to realign the Deutscher Ring companies. On June 8 they signed the contract to this effect.

It provides that DR Leben/Sach and DR Kranken shall be fully separated. All staff will receive one job offer. Of the staff with dual contracts of employment, half will receive one job offer from DR Leben/Sach or one from the SIGNAL IDUNA Group respectively. The sales partners of the Deutscher Ring tied-agent organisation will be divided in such a way that transferring sales representatives can, to certain upper limits, continue to oversee their insurance portfolios and thereby ensure continuity for their customers. The joint holdings will be realigned.

Following the separation, Baloise will forge ahead with closer interlinking of its German subsidiaries in order thereby to establish a platform for profitable growth. The existing strengths will be pooled in centres of expertise with the products being combined into a strong line-up. DR Leben/Sach will, together with Basler Versicherungen, constitute the strategic business unit of the Baloise Group in Germany.

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Germany is a core market for Baloise, where the Group is aiming to grow faster than the market. The organisation matrix of the German subsidiaries – Deutscher Ring Lebensversicherungs-AG (DR Leben) and Deutscher Ring Sachversicherungs-AG (DR Sach) in Hamburg and Basler Versicherungen in Bad Homburg – was inefficient and therefore unsuitable for attaining these growth objectives. Thus in November 2008, all German business units were put under the same management to link them more closely. Previously, DR Leben/Sach and Deutscher Ring Krankenversicherungsverein a.G. (DR Kranken) – which as an independent insurance company is not part of Baloise – were controlled by the same executive committee. Following the establishment of a uniform management board, representatives of the Baloise German subsidiaries conducted a detailed assessment of the current situation. In March 2009, the resulting measures were presented, which aim at linking the German units more closely. In particular, the position of the Sales units is to be strengthened and the companies’ efficiency enhanced by establishing competence centres at the primary locations in Hamburg and Bad Homburg. Baloise anticipates synergy effects from the closer networking in the amount of 20 - 25 million euros annually as of 2012. In April 2009, DR Kranken merged with the Signal Iduna Group to become a horizontally organised group sharing the same executive board members. Signal Iduna is a direct competitor of both DR Leben and DR Sach. The resulting combine contravened insurance supervision law as well as competition law. The German Federal Cartel office in November 2009 and the Federal Financial Supervisory Authority (BaFin) in February 2010 therefore warned that the Deutscher Ring companies had to be separated. In March 2010, DR Leben/Sach and DR Kranken mutually agreed to terminate the organisational agreement between the Deutscher Ring companies that had existed until then and thereafter engaged in negotiations on amicable separation. In April, the parties agreed on a letter of intent to realign the Deutscher Ring companies. On June 8 they signed the contract to this effect. It provides that DR Leben/Sach and DR Kranken shall be fully separated. All staff will receive one job offer. Of the staff with dual contracts of employment, half will receive one job offer from DR Leben/Sach or one from the SIGNAL IDUNA Group respectively. The sales partners of the Deutscher Ring tied-agent organisation will be divided in such a way that transferring sales representatives can, to certain upper limits, continue to oversee their insurance portfolios and thereby ensure continuity for their customers. The joint holdings will be realigned. Following the separation, Baloise will forge ahead with closer interlinking of its German subsidiaries in order thereby to establish a platform for profitable growth. The existing strengths will be pooled in centres of expertise with the products being combined into a strong line-up. DR Leben/Sach will, together with Basler Versicherungen, constitute the strategic business unit of the Baloise Group in Germany.