<div id="readability-page-1"><div>Related Content: EMEA 2026 Insurance OutlookFitch Ratings-Frankfurt/London-09 December 2025: Consolidation in the German life insurance sector from closed-book acquisitions will accelerate in 2026, Fitch Ratings says. The market for consolidators in Germany is maturing in our view, while the sector has more than EUR100 billion of liabilities in closed books that could become available.The incentives to dispose of legacy books to run-off specialists stem from rising administrative costs, including IT migration costs, relative to the declining number of policies. In addition, disposals allow life insurers to focus on new business and can free up capital.For the run-off specialists, who have the advantage of scale, closed book acquisitions will help maintain volume growth, supporting their continuing strong financial performance. Potential closed-book transactions are subject to regulatory scrutiny, which focuses on the fair treatment of policyholders and sound corporate governance.Nevertheless, we believe the underlying drivers of consolidation will lead to more transactions next year. Zurich Insurance Group is “evaluating options” regarding a possible sale of its closed German life portfolio. Given its total assets of almost EUR20 billion, we estimate that the German market could see transactions with a volume of up to EUR25 billion next year.This would be the second largest annual amount since the first closed-book transactions in Germany in 2014, although it would continue the pattern of annual totals being skewed by large individual transactions. The previous highest total - EUR49 billion in 2018 - was almost entirely due to Viridium Group’s acquisition of Generali Deutschland’s closed book portfolio.Viridium and Frankfurter Leben are the two largest German life consolidators, while we could see more internationally focused, Bermuda-based Athora (Insurer Financial Strength (IFS) rating A/Rating Watch Positive) increase its presence in the German market. Athora has sizeable operations in the Netherlands and in the UK (the latter pending regulatory approval of the Pension Insurance Corporation acquisition). Fitch assigned Viridium and Frankfurter Leben first-time IFS ratings of ‘A+’ and ‘BBB+’, respectively in 2025. The Outlooks on the ratings are Stable.We expect the run-off specialists to maintain their capital strength in the medium term, supported by sustained operating capital generation. Our expectation that German life insurers, including consolidators, will maintain strong capital positions in 2026 is reflected in our ‘neutral’ outlook for the sector in 2026.&lt;br/&gt;&lt;br/&gt;Germany’s weak economic environment in recent years has dampened policyholders’ willingness to invest in life savings products. Should there be a significant deterioration of the German life insurance operating environment, the sector could face increased lapses, which may lead to some insurers realising capital losses within their fixed-income investments. However, we regard this as unlikely given the previous generally low lapse rates in Germany.&lt;br/&gt;&lt;br/&gt;For the German life insurance market, we expect premium income to be stable in 2026 after growth of 5% in 2025. This had been driven by single premiums growth of 20%, which we expect to be flat in 2026. We forecast a slight increase of approximately 2% in new annual-premium business in 2026, with the potential for materially stronger growth if the uncertainty surrounding the German economy recedes.&lt;br/&gt;&lt;br/&gt;We expect German life insurers to maintain strong capital positions in 2026, with Solvency 2 ratios close to 300% on average at both end-2025 and end-2026, underpinned by market interest rates exceeding average guaranteed rates. This is net of the additional mathematical reserve or Zinszusatzreserve (ZZR) within insurers’ legacy books. Most German life insurance companies will report small declines in their ZZR until end-2026 because the reference rate will be stable at 1.57%.&lt;br/&gt;&lt;br/&gt;Fitch analysts discussed their German life insurance sector outlook and prospects for life consolidators on a recent &lt;i&gt;Fitch in Five&lt;/i&gt; event. A replay is available &lt;i&gt;&lt;a href=&#34;https://events.fitchratings.com/germanlifeinsurance2026outlook?_gl=1*1ns4bwf*_gcl_au*MTI4NjQzNzEzMy4xNzYyMTc5NDEw*_ga*MTQ2ODU2Njg1NS4xNzYyMTc5NDEw*_ga_E58YZGKRFB*czE3NjQ5MjQzNTUkbzI0JGcxJHQxNzY0OTI0NDQ3JGozMSRsMCRoMA..&#34; target=&#34;_blank&#34;&gt;here&lt;/a&gt;&lt;/i&gt;.&lt;br/&gt;&lt;br/&gt;Contacts:&lt;br/&gt;&lt;br/&gt;Dr Christoph Schmitt&lt;br/&gt;Director, Insurance&lt;br/&gt;+49 69 768 076 121&lt;br/&gt;&lt;a href=&#34;https://mailto:christoph.schmitt@fitchratings.com&#34; target=&#34;_blank&#34;&gt;christoph.schmitt@fitchratings.com&lt;/a&gt;&lt;br/&gt;&lt;br/&gt;Fitch Ratings – a branch of Fitch Ratings Ireland Limited&lt;br/&gt;Neue Mainzer Strasse 46-50&lt;br/&gt;D-60311 Frankfurt am Main&lt;br/&gt;&lt;br/&gt;Alberto Messina&lt;br/&gt;Senior Director, Insurance&lt;br/&gt;+49 69 768 076 234&lt;br/&gt;&lt;a href=&#34;https://mailto:alberto.messina@fitchratings.com&#34; target=&#34;_blank&#34;&gt;alberto.messina@fitchratings.com&lt;/a&gt;&lt;br/&gt;&lt;br/&gt;Finn Dirks&lt;br/&gt;Associate Director, Insurance&lt;br/&gt;+49 69 768 076 103&lt;br/&gt;&lt;a href=&#34;https://mailto:finn.dirks@fitchratings.com&#34; target=&#34;_blank&#34;&gt;finn.dirks@fitchratings.com&lt;/a&gt;&lt;br/&gt;&lt;br/&gt;Mark Brown&lt;br/&gt;Senior Director, Risk&lt;br/&gt;Credit Commentary and Research&lt;br/&gt;+44 20 3530 1588&lt;br/&gt;&lt;a href=&#34;https://mailto:mark.brown@fitchratings.com&#34; target=&#34;_blank&#34;&gt;mark.brown@fitchratings.com&lt;/a&gt;&lt;br/&gt;&lt;br/&gt;&lt;br/&gt;&lt;br/&gt;Media Relations: Matthew Pearson, London, Tel: +44 20 3530 2682, Email: matthew.pearson@thefitchgroup.com&lt;br/&gt;&lt;br/&gt;The above article originally appeared as a post on the Fitch Wire credit market commentary page. 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ZURVY

Fitch Ratings predicts accelerated consolidation in the German life insurance sector in 2026 due to closed-book acquisitions. Rising administrative costs and regulatory scrutiny are driving disposals, allowing insurers to focus on new business. Zurich Insurance Group is considering selling its closed German life portfolio. Despite Germany's weak economic environment, premium income is expected to be stable, with strong capital positions maintained. Fitch's outlook for the sector in 2026 is neutral, with Solvency 2 ratios close to 300%.

Fitch Ratings: German Life Sector Closed-Book Consolidation to Accelerate in 2026