Private Equity in the German Insurance Industry

The German insurance industry is still largely regarded as a closed shop, strategically controlled by the big insurance company groups, but there are now signs that the private equity industry is turning its attention to the insurance sector. Dr. Johannes Schulte and Sebastian Kost, respectively partner and associate at Munich based law firm Hogan & Hartson, outline the legal and regulatory considerations that would govern private equity investments in the German insurance sector.

Private equity as an investment form is gaining ground in the German insurance industry. Against the background of rising pressure on returns, insurance companies are increasingly making private equity investments with strong long-term historical returns, on average ranging between 10% and 15%.