Insr has entered into an agreement to sell insurance portfolio to Storebrand
Oslo, 14 August 2020
Insr Insurance Group ASA (“Insr” or the “Company”, OSE: INSR) announced today that it has entered into an agreement for the sale of the substantial part of its Norwegian insurance portfolio to Storebrand Forsikring AS (“Storebrand”), a subsidiary of Storebrand ASA (OSE: STB)
The agreement with Storebrand is a result of the strategic review announced in the stock exchange announcement on June 29, 2020, where Insr also announced that it had been notified that the Norwegian Financial Supervisory Authority (the "NFSA") considered to withdraw Insr’s license to operate (the "NFSA Process").
The transaction is expected to be completed as a portfolio transfer and will be structured in a manner where Storebrand has the right and obligation to offer new insurance policies to the substantial part of Insr’s customers. The substantial part of Insr’s insurance portfolio will be gradually transferred over to Storebrand as policies are renewed or amended. The transfer process is expected to commence before the end of 2020 and is expected to last until the end of 2021. During this period, Storebrand will pay Insr 20-30% of renewed written premiums. Storebrand has guaranteed a minimum payment of NOK 70 million, to be paid no later than 6 months after the end of the renewal period.
At the end of the renewal period, Insr will have eliminated substantially all remaining insurance risk in Norway.
Completion of the transaction is conditional on approval by the NFSA, including that Insr maintains a license to operate from the NSFA on conditions that enables the Company to fulfil its obligations under the agreement with Storebrand. No assurance can be given regarding the outcome of the NFSA approval process.
The transaction is further conditional upon approval by the Norwegian Competition Authority. The transaction represents such a significant change in the Company's business that the Board of Directors has resolved that completion of the transaction is conditional on the shareholders of Insr approving the transaction by a 2/3rd majority at an extraordinary general meeting, which will be held by the end of September 2020 (the "EGM").
While the transaction facilitates a transfer of a substantial part of the Company's insurance portfolio, there are certain affinity agreements and run-off portfolios that will remain with the Company. Insr is currently in discussion with several specialists to evaluate a sale of these assets. Updates on this process will be given in due course.
With regards to the NFSA Process referred to above, Insr will today timely submit its response and present the NFSA with a plan for a complete transfer of the insurance business without dissolving the Company. It should be noted that, also considering the announced transaction, no assurance can be given regarding the outcome of the NFSA Process, meaning that the risk of withdrawal of the license still remains.
Following divestment of all insurance risk, the board is committed to ensure the preservation of the Company and return all remaining proceeds to the shareholders.
“It is sad that Insr must withdraw from the insurance business given all the enthusiasm from shareholders, colleagues and partners during this attempt at challenging this mature market. Customers have been the key priority and have always been well protected and serviced throughout this journey. However, I am equally confident that Storebrand will become a great home for our customers and many of our partners”, stated Espen Husstad, CEO of Insr.
Support from board of directors, management and Insr shareholders
The transaction is supported by the board of directors of Insr, who has unanimously concluded that the transaction represents the best alternative for shareholders and all stakeholders. It should also be noted that the board has assessed various other alternatives but has arrived at the conclusion that the agreement with Storebrand is likely to yield the highest value to shareholders.
In addition, Insr shareholders representing more than 32% of the share capital have given their support to the transaction and pre-agreed to vote in favour of the transaction at the EGM.
Current trading update
Largely due to additional reservations in the discontinued business, the solvency position weakened during June, but is still above regulatory minimum.
Carnegie acts as financial advisor and Wiersholm acts as legal advisor to Insr. ABG Sundal Collier acts as financial advisor and Wikborg Rein as legal advisor to Storebrand.
For further information, please contact:
Chief Executive Officer, Insr Insurance Group ASA
Tel: +47 934 80 932
Insr was established in 2009 and is a Norwegian-based insurance company with primary focus on property and casualty insurance for the retail and small & mid-sized enterprise segment. Insr distributes its products mainly through partners and insurance agents with Norway as target market. Insr is regulated by the NFSA and has a license for all groups of non-life insurance (except for credit and guarantee insurance). The company is headquartered in Oslo, Norway.
For more information visit Insr online at www.insr.io.