No, the German football champions Bayer 04 Leverkusen will not be wearing “Barmenia Gothaer” on their jerseys this season, even though the merger of the two insurers is close to completion. In 2024/2025, the simple “Barmenia” will remain in the first Bundesliga.
The new name will be there in the future, but not in the season that is now starting, says Andreas Eurich, head of Barmenia and one of the two co-heads of the merged group. “The jerseys have to be discussed with the DFB long before the start of the season and also produced,” he says. At least in the stadium, the group wants to adapt its advertising as quickly as possible. “And as soon as we can change the jerseys, we will do so.” The sponsorship contract runs until 2028. Barmenia is keeping quiet about the amount that the insurer transfers annually. Bundesliga experts speak of eight million euros.
On Friday, the financial regulator Bafin approved the merger of the two insurance groups Barmenia in Wuppertal and Gothaer in Cologne. The ambitious project has thus overcome almost all hurdles. As soon as the merger is entered in the commercial register, which could be in September, it will be valid retroactively to January 1, 2024.
The management is satisfied. “We have the impression that the demanding process is now bearing fruit,” says Gothaer CEO Oliver Schoeller. Eurich added: “The past few months have been very ambitious, we had a very ambitious schedule from the start.” But now that Bafin has also given its approval, this is “a great result.”
The merger is a billion-dollar deal. Gothaer generates 4.9 billion euros in premium income per year, Barmenia 3.1 billion euros. Nevertheless, the Cologne-based company was previously only ranked 15th in the industry’s size table, while the Wuppertal-based company was ranked 21st. Together they will be number ten in the market in the future, replacing Signal Iduna in Dortmund.
Jobs should be retained
“Barmenia is particularly strong in health insurance, we are in property insurance and life insurance,” says Schoeller. So far, the providers have stood side by side as specialists. “In the future, our customers will have a company that is much more broadly positioned and has a comprehensive range of insurance products,” he says. Will it also be cheaper for customers? “Above all, it will be better,” he replies. “Of course there are also cost aspects.” Schoeller does not reveal how much the new group wants to save. In any case, the 4,900 jobs at Gothaer and the 2,200 at Barmenia are to be retained. In addition, around 4,500 insurance agents work for the new group.
Mergers are rare in the insurance market, even though it is very fragmented. Potential partners have hundreds of thousands or even millions of customers, often with long-term contracts and corresponding claims against the companies, operate different IT systems and have complex structures – a nightmare. When mergers do occur, they are usually distress sales or portfolio adjustments in which a group sells off a branch of business.
There is no sign of distress at Barmenia and Gothaer; both are growing strongly and making profits. Nevertheless, the two sides decided to merge a year and a half ago. This was an ambitious plan because both are run by mutual insurance associations, i.e. they are not joint stock companies but cooperatives. They belong to their policyholders. But you can’t just buy or sell an association.
The new structure will therefore not necessarily be simpler. The actual parent company of the new group is the Barmenia Gothaer Finanzholding in Cologne. It controls the active companies. The Finanzholding in turn belongs to two insurance associations. The Gothaer Association in Cologne holds 64 percent of the group, the Barmenia counterpart in Wuppertal 36 percent.
Despite the clear ownership structure, Barmenia should not be disadvantaged. Both insurers have stipulated this in their future articles of association. Eurich: “All decisions in the new group must be made jointly, both sides have the same voting rights. This has been well received, as has the fact that Oliver Schoeller and I are equal CEOs.”
“We have already solved many problems on the way to the merger.”
As a rule, companies spend two or three years dealing with themselves after such changes. Eurich does not expect the new group to be like that. “We have already solved many problems on the way to the merger,” he says. “Of course, there is still a lot to come. But the goal is clear: to bring the best of both worlds into the future. Of course, we have to sort things out, whether that’s specific products or IT systems.”
The future Barmenia Gothaer also has enough problems, like most insurers: losses in car insurance, a shortage of skilled workers, customers are worried about the slow processing of claims and reimbursements, especially in car and private health insurance. At Barmenia, at the beginning of the year, it took four weeks or more for customers to receive reimbursement for their submitted medical bills. “That has improved again,” says Eurich. “But we had periods of processing that were too long, and we still have arrears.”
Long processing times for claims always have a negative effect, adds Schoeller. “It starts with customer satisfaction and continues with lawyers being called in earlier.” An insurer must aim to process property claims within a week and also become faster in health insurance. Who is to blame for such problems? Schoeller: “This is a consequence of the demographic problem that all insurers have. There is a lack of skilled workers. And we have far too little digitization when you consider what would be possible.” Added to this is the high growth of more than ten percent per year at Gothaer.
Gothaer insures around a million cars, Barmenia around 40,000. Schoeller has announced price increases. “We probably won’t be able to avoid it, it’s driven by inflation,” he says. “But we also have to find new solutions with the manufacturers. The costs are rising unnecessarily because entire parts are always being replaced, for example in the electronics, instead of being repaired.” Electric cars are particularly conspicuous. “There are only replacements and actually never repairs.”
