Our business model

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Viridium Group

Viridium at a glance

Viridium Group is Germany's leading life insurance consolidator with 3.4 million policies and assets under management of EUR 67 billion as of year-end 2023. With a market share of approximately five per cent, we are one of the five largest life insurers in Germany.

Consolidation of life insurance portfolios

Consolidation of life insurance portfolios as a business model is well established and recognised. It enables a modern, stable, and sustainable management of closed life insurance portfolios.

This means: We consolidate the previously often highly fragmented portfolios and transfer them to a single, modern and scalable business platform. We significantly improve the entire value chain, from IT and customer service to actuarial services and asset management. We also insulate life insurance portfolios as much as possible from external risks, such as interest rate, market, cost and biometric risks.

As a result, we make existing life insurance policies more attractive and create tangible value for our customers and shareholders. This is evidenced in improved returns, strong capitalisation and our single, modern business platform.

 

Our leading market position is built on three competitive advantages

What makes us unique?

Focus

We specialise exclusively in existing life insurance policies within a defined geographical area.

Scale

We consolidate and manage previously highly fragmented insurance portfolios on one single, modern business platform.

Skills

We are a highly motivated and specialised team committed to continuous improvement.

Tangible advantages for customers

Improved returns

Reduced administrative costs: 

  • We immediately reduce the cost per policy by 10 per cent from the time of acquisition.
  • While the cost per contract normally increases due to fixed costs as the portfolio shrinks, we guarantee fixed costs per contract will remain stable in the future.*
  • Viridium and its shareholders cover 100 per cent of the investments in modernising the business. By contrast, the costs are normally shared with customers in German life insurance.

    * Partially adjusted for indexed inflation.

Higher profits allocated to policyholder:

  • Policyholders directly benefit from improved profitability due to cost reductions, improvements in the investment portfolio and the stabilisation of what is known as the “risk result”.**

    ** Policyholders benefit from higher allocated profits in accordance with the profit-sharing rules of German life insurance – Mindestzuführungsverordnung (MindVZ). 

This infographic shows the allocated policyholder profits per life insurance policy. In each case at the time 3 years before and 3 years after acquisition by Viridium.
This infographic shows the allocated policyholder profits per life insurance policy. In each case at the time 3 years before and 3 years after acquisition by Viridium.
  • We pass on higher profits through allocations to our customers.
  • Since the acquisition by Viridium, we have increased the minimum interest rate* for Proxalto from 1.25% to 2.60%. With a minimum interest rate of 3.35%**, Entis Lebensversicherung is at the top of the German market.

    * Minimum interest rate equals guaranteed interest rate plus interest bonus rate.
    ** Minimum interest rate from January 2025 onwards.
This infographic visualizes the development of the minimum interest rate of Proxalto and Entis - before and after acquisition by Viridium.
This infographic visualizes the development of the minimum interest rate of Proxalto and Entis - before and after acquisition by Viridium.

Strong capitalisation

  • We ensure a sustainably strong capital base under Solvency II. All life insurers of Viridium Group are capitalised well above regulatory requirements, ensuring high financial resilience.

Sustainable operational stability

  • We consolidate and manage previously highly fragmented insurance portfolios on a single, modern business platform, in which we have already invested over EUR 700 million. We continuously improve our existing platform and thereby ensure its operative stability and reliability. 

Low lapse ratios

Lapse ratios, meaning early surrenders by policyholders, are a key indicator of whether policyholders perceive their policies as safe and financially attractive. Since becoming part of Viridium, lapse ratios have declined significantly across all companies:

This infographic visualizes the development of lapse ratios at Proxalto, Entis, Heidelberger Leben and Skandia - in each case 3 years before and 3 years after acquisition by Viridium.
This infographic visualizes the development of lapse ratios at Proxalto, Entis, Heidelberger Leben and Skandia - in each case 3 years before and 3 years after acquisition by Viridium.

The lapse ratios of Viridium’s life insurance companies have declined more than the market average since their acquisition by Viridium. As of 2023, the average unit lapse ratio across all four Viridium life entities is approximately 2%, below the market average of around 2.6% (source: Statista / GDV).

Policyholder rights remain unchanged

The acquisition of life insurance portfolios by Viridium transfers the life insurance policies along with all their associated rights and obligations. The rights of policyholders remain unchanged for the entire duration of the contracts, with no action required from policyholders.

Distribution partner terms remain valid

When a life insurance company is acquired by Viridium, all relevant agent relationships generally remain in place. This ensures that agreed commissions for distribution partners – such as commissions for sales, premium increases and portfolio maintenance – remain unaffected.

Granular regulatory oversight

A key priority for BaFin is to ensure that policyholders’ rights are fully protected and the contracts terms are entirely fulfilled in the future.

The acquisition of a life insurance company must therefore undergo a detailed regulatory review, which is conducted to safeguard the interests of policyholders.

Accordingly, all acquisitions of life insurers by Viridium Group have been subject to intensive review by BaFin.