Youplus Group, a company that specialises in the management of insurance portfolios, is exploring options to secure additional capital, reported Bloomberg.  

This development comes as the company’s solvency ratio has fallen below an “internally defined range”, said Youplus in an emailed statement to the media outlet. 

As a precautionary step, Youplus Group has ceased initiating new business operations within several European markets including Germany, Norway, the Czech Republic and Slovakia.  

The company stated: “The liquidity and solvency of Youplus is not at risk – all liabilities are covered. In order to strengthen the capital base, the existing shareholders are looking for new, qualified investors, among other things.” 

It further added: “In addition to strengthening the capital base, further de-risking activities are under way to restructure the Youplus Group.” 

For instance, the insurer said that it is pursuing “partial sales of individual portfolios, optimisation of internal processes, and the introduction of additional controls”. 

The origins of the current financial situation date back to an assertive growth strategy launched by Youplus Group in 2023, which initially appeared to yield positive results.  

However, the company later encountered issues with intermediaries that it characterised as “fraudulent”, leading to a reassessment of its business model. 

At that time, the insurer noted: “In the initial months, new business volumes exceeded expectations. 

“However, over time the company had to gradually recognise that a significant portion of the submitted new business did not meet the requirements for sustainable value creation. The company became the victim of fraudulent business models involving upfront commission payments.” 

Subsequently, Youplus Group has transitioned to a strategy focused exclusively on the management of existing policies and the resolution of related claims, refraining from the pursuit of new contracts. 

The broader economic environment, characterised by a downward trend in interest rates, has also played a role in the company’s challenges, the media report noted.  

The company’s solvency ratio experienced a sharp decline to 107% by the end of 2024 from a robust 286% in 2023.  

Youplus Group, founded in 2012, was part of a host of businesses backed by private capital that have aimed to acquire and manage legacy insurance portfolios from larger insurers.  

The company’s majority ownership lies with an affiliate of a Swiss family office overseen by entrepreneur Klaus Mutschler.  

Additionally, Hannover Re, a German reinsurance company, holds an interest in Youplus Group.