German insurance group Gerling has sold its reinsurance business as part of a new plan to reposition itself as a Europe-focused primary insurance group. The company has already announced the sale of its Australia business renewals to QBE, with the local Gerling branch reduced to a small services company.

Reports from Europe said that from next year, Achim Kann, the Chairman of Frankona Re, will take over the group’s entire reinsurance business. Gerling’s sole focus will now be on primary insurance including industrial property and casualty business, credit insurance and company pension schemes.

Mr Kann agreed to buy Gerling’s property/casualty business for $353.7 million, but under the agreement the money will only be paid when he makes at least this amount from the run-off property/casualty business or from an upcoming sale of Gerling’s reinsurance arm. Until Mr Kann makes $353.7 million in profit, he will pay interest on the agreed amount to Gerling.

Gerling has indicated it wants to sell its life reinsurance business and is in the process of transferring it to a separate subsidiary. That will also be sold to Mr Kann if it fails to secure an alternative buyer by the end of the year.

Gerling Holding Chairman Heinrich Focke said the sale of the reinsurance business could make it easier for the company to find a new majority shareholder. “The repositioning will make our company that much more attractive and create favourable underlying conditions for the upcoming change of shareholder in the group,” he said.