Munich Re Unit

Ergo to launch industrial insurer

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Watch this face. Source: Allianz

Around two years after taking the helm of German insurer Ergo, Chief Executive Markus Riess has embarked on an extensive restructuring program. As well as making some changes to top management, he wants to set up a new industrial insurance unit within the group, which belongs to German reinsurance giant Munich Re.

Mathias Scheuber, 60, will become the new head of the group’s subsidiary Ergo Versicherung AG. Mr. Scheuber, considered an expert in the shift to digital claims processing, will join the company from German insurer Allianz, where Mr. Riess has also worked previously. He will take over from Markus Hofmann, who will remain in charge of broker sales at Ergo Versicherung, but will also take on management tasks at the new industrial insurer, Ergo International Corporate Solutions.

Peter Stockhorst, 52, until now head of the direct insurer Ergo Direkt, will leave the company and will be replaced by Sebastian Rapsch, 45, who comes from within Ergo. Silke Lautenschläger, a member of the management board of Ergo Versicherung, will leave to join the company’s subsidiary DKV in Belgium.

The management changes are due to come into effect at the start of 2018. “I look forward to pushing ahead with the implementation of our strategy program with this reorganization of the team,” Mr. Riess said.

The management reshuffle comes at a difficult time for Ergo, which has been making losses but hopes to return to profit this year.

The chief executive is shaking up the company’s senior management at a difficult time. Ergo, which is undergoing restructuring, hopes to return to profit this year following a period of losses, and is aiming for a profit of about €600 million ($711 million) by 2021. Mr. Riess is also considering a possible sale of around six million life insurance policies at the group’s Ergo Leben and Victoria Leben units, to free up capital.

The group had announced at the end of September that it was considering a sale of the two subsidiaries, and confirmed in early November that it had received a large amount of interest. Bund der Versicherten, a consumer protection organization for the insurance sector, warned of drastic consequences for customers. In the Bundestag, Chancellor Angela Merkel’s Christian Democratic Union and its sister party, the CSU, recently announced that they would no longer stand back and allow insurance portfolios that were no longer profitable to be sold.

Achim Kassow, a top manager at Ergo, defended the step, saying that Ergo was aware of its responsibility to customers and staff. Ergo will decide by the end of November at the earliest whether to continue with the sale.

Carsten Herz leads Handelsblatt’s asset management and insurance coverage and is based in Frankfurt. To contact the author: herz@handelsblatt.com
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