Posted on 20 Nov 2009
Ergo Versicherungsgruppe, the primary insurance unit of reinsurer Munich Re that dropped its profit target two weeks ago, will withdraw three brands and sell insurance in Germany under the Ergo label to boost growth.
The KarstadtQuelle Versicherungen direct insurance unit will be renamed Ergo Direct Insurance as soon as the first quarter of 2010, Dusseldorf-based Ergo said in a statement today. The Victoria Versicherung AG and Hamburg-Mannheimer Versicherungs-AG brands will be withdrawn in the second half of next year.
“Action was called for” with regard to the KarstadtQuelle brand after the insolvency of Arcandor AG, the German retailer that owns the Karstadt department store chain and the Quelle mail-order business, Ergo said. Ergo bought the KarstadtQuelle insurance unit last year after owning a stake since 2002.
Ergo’s life insurance business, largely sold under the Victoria and Hamburg-Mannheimer labels, has been criticized by analysts in the past for being a drag on profit partly because of the different brands. Ergo plans to sell new life-insurance business through Hamburg-Mannheimer, which will be re-branded Ergo. Victoria will stop selling new business. It hasn’t been decided if Victoria will be merged with the other life-insurance operations, Ergo Chief Executive Officer Torsten Oletzky said.
“Having several brands for the same segment isn’t transparent for the customer,” Oletzky said in a media conference call. The changes won’t lead to job cuts, he said.
The property and casualty insurers of Victoria, Hamburg- Mannheimer and D.A.S. Versicherungen will be merged under the Ergo brand, the insurer said.