AXA Germany has entered into an agreement with Athora Germany to sell a portfolio of €16bn of life and pensions insurance reserves in Germany.

As reported by our sister title, Insurance Asset Management, under the terms of the agreement, AXA Germany will sell the portfolio to Athora Germany for a consideration of €660m. The sale is expected to result in estimated net cash proceeds of €0.4bn to AXA S.A.

AXA intends to offset the earnings dilution from the disposal with a share buyback to be launched following the closing of the transaction. As part of the transaction, AXA IM will enter into an agreement to provide asset management services to Athora until 2028.

The portfolio has been closed to new business since 2013 and is mainly composed of traditional savings policies, with an average guaranteed rate of 3.2%. The reduction of guarantees on AXA’s balance sheet resulting from the sale will further diminish the group’s exposure to financial market risk.

In addition, the disposal will have an immaterial impact on AXA Group’s Solvency II ratio.

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