Press release 18 April 2016
German property-casualty insurer ERGO Versicherung offers a warranty and indemnity insurance for company takeovers. It safeguards buyers and sellers against possible risks arising from breaches of warranties in a sales agreement. ERGO is the first German insurer to react to the growing number of M&A transactions in Germany.
Takeovers and mergers involving German companies are on the increase, with the number of transactions rising from 1,007 in 2010 to 1,507 last year. According to experts, the trend in the sale of businesses is set to continue, for example with business succession in small and medium-sized companies. This development requires insurance solutions that have been largely unknown in Germany to date, and includes warranty and indemnity insurance that was first offered in Germany around ten years ago albeit with English contract terms.
The target group for this new product is small and medium-sized businesses, insolvency administrators and private equity funds. “We are known among SMEs as a reliable insurer based in Germany”, emphasised Christian Diedrich, responsible for property-casualty insurance on the ERGO Board of Management. “We understand our customers. That is the reason why we, as one of the first insurers, are now working in this area to provide contract texts in German and based on German law.”
Warranties are passed on from the seller to the buyer when companies transfer ownership. Warranty and indemnity insurance safeguards buyers and sellers of companies against possible risks arising from breaching a warranty contained in a sales contract. This includes, for example, liability arising from a breach of warranty related to balance sheets, industrial property rights or state subsidies. Warranty and indemnity insurance can be taken out by the buyer (own-loss cover) or the seller (property indemnity cover).
A large number of transactions in Germany are carried out by small and medium-sized companies in the industrial sector. “ERGO is well known in the commercial and industrial insurance sector, therefore we see great opportunities to successfully position this innovative product on the market”, explained Diedrich.
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About the ERGO Group AG
ERGO is one of the major insurance groups in Germany and Europe. Worldwide, the Group is represented in over 30 countries and concentrates on Europe and Asia. ERGO offers a comprehensive spectrum of insurance, provision and services. In its home market of Germany, ERGO ranks among the leading providers across all segments. About 43,000 people work for the Group, either as salaried employees or as full-time self-employed sales representatives. In 2015, ERGO recorded a premium income of 17.9 billion euros and rendered benefits to customers of 16.8 billion euros. ERGO is part of Munich Re, one of the world's leading reinsurers and risk carriers.
More at www.ergo.com
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of ERGO Group. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forwardlooking statements or to conform them to future events or developments.