Germany’s Deutsche Bank is giving up its 34.6% stake in ailing insurance and reinsurance company Gerling and taking up a stake in a reconstructed Gerling NCM, the second-largest global credit insurer with a 25% share of the market.

The Gerling family is picking up the Gerling stake, at the same time reducing its share in Gerling NCM from 55.9% to 3%. The credit insurance operation will be taken over by Swiss Re (47.5%) and Deutsche Bank (35.2%), with one private investor and a Gerling pension fund owning the rest.

A public float of the company is expected now that the Gerling family’s stake has been diluted. The cash realised from the sale might even be useful to the family, but the move to full ownership doesn’t solve Rolf Gerling’s biggest problems: how to reduce the family’s stake in the company and where to find an investor to take the company forward.

The once-profitable heavy industry insurance and reinsurance specialist came apart two years ago after suffering crippling losses in the US market. Mr Gerling and Deutsche Bank decided to withdraw from global operations and concentrate only on European business while they sought a new partner. None has so far been forthcoming.

Gerling’s insurance and reinsurance operations in Australia, despite being highly successful businesses, are both in run-off.