LONDON (Realist English). U.S. private equity giants such as Apollo Global Management and KKR will face serious obstacles in their attempts to expand into Europe’s insurance market, Zurich Insurance chief executive Mario Greco told the Financial Times.
“I’m not sure the same asset-gathering philosophy that they’ve had in the U.S. can work in Europe,” Greco said. “They’ve been growing in markets where regulatory controls were lighter than in Europe. So far in Europe, they have not grown as they did in the U.S.”
The warning comes after a series of high-profile deals. In July, Apollo-backed Athora struck a £5.7bn agreement to acquire a UK retirement savings group — a pivot in strategy after earlier struggles to expand in Europe. Weeks later, Canadian investment firm Brookfield announced a £2.4bn takeover of London-listed life insurer Just Group.
Zurich, one of Europe’s largest insurers, has been looking to divest a $20bn life insurance portfolio after a planned sale to Viridium collapsed last year amid mounting regulatory scrutiny of private equity ownership in the sector.
Greco argued that the U.S. private capital model, which thrives on exploiting lighter capital rules, faces a mismatch in Europe.
“Life insurance is a medium to long-term business, and private equity is a short to medium-term business,” he said. “There must be alignment, because customers don’t like to hear there is a change in ownership of their liabilities.”
Apollo CEO Marc Rowan acknowledged in October that regulatory barriers had slowed its European ambitions, though he said dialogue on liberalising securitisation and private asset rules was “just starting.”
The European Commission has launched a consultation on capital rules for insurers, part of a broader reform that could free up as much as €90bn for the industry. Trade group Insurance Europe welcomed the move as a step to address “excessive conservatism” in capital buffers.
