Legacy acquirer DARAG Group has signed a new portfolio transfer pact with Germany-based re/insurer major SCHWARZMEER UND OSTSEE Versicherungsaktiengesellschaft (SOVAG).

As per the terms of the agreement, the legacy portfolio comprising direct insurance and inwards reinsurance business will be transferred to DARAG’s German risk carrier, DARAG Deutsche Versicherungs- und Ruckversicherungs.

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The insurance business comprises various specialty lines including liability, property, transport and motor, with clientele located in Germany, Spain, Malta, Belgium, the Netherlands and Austria.

The inwards reinsurance portfolio includes European and international business, underwritten by SOVAG’s UK branch while German risks underwritten by its Hamburg office.

DARAG Group CEO Tom Booth said: “SOVAG’s diversified book is a great match with DARAG’s other portfolios and this transaction highlights our deep understanding of the German re/insurance market’s legacy needs.

“Germany remains an important market for DARAG, as we press ahead with our long-term expansion strategy across Europe and beyond.”

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SOVAG CEO Arndt Gossmann Arndt Gossmann said: “The sale of our run-off portfolio has been a major step in SOVAG’s restructuring and we are satisfied to hand over a legacy portfolio that is in excellent financial shape.

“DARAG’s strength and reliability have been the determining factors for our decision. In DARAG we have an excellent partner to ensure that the portfolio and the outstanding claims are dealt with at the highest level.”

Financial terms of the transaction have not been disclosed.

The deal is subject to receipt of regulatory approval from the German Federal Financial Supervisory Authority, BaFin.

DARAG said that the company will provide complete finality for the legacy business, as requested by SOVAG’s shareholders after completion of its restructuring.