W&W Aims to Add to Capital Before New Insurance Rules in Europe
Wuestenrot & Wuerttembergische AG (WUW), a German insurer and home lender, said it will increase its capital buffers by a third by retaining earnings over the next five years as regulators plan stiffer rules for European insurers’ reserves.
“We aim to add about 1 billion euros ($1.4 billion) to our equity capital over the next five years to comply with tightened capital requirements,” W&W Chief Executive Officer Alexander Erdland said at a press conference today at its headquarters in Stuttgart, Germany. The insurer had 2.84 billion euros of equity capital at the end of last year.
The company aims for 180 million euros in profit this year after 188 million euros in 2010, it said. The figure is expected to rise to a “sustainable level” of 250 million euros in 2012, Erdland said. W&W acquired home-loan provider Allianz Dresdner Bauspar AG from Frankfurt-based Commerzbank AG last year.
Insurers’ capital requirements are set to rise in Europe with Solvency II, a proposed new risk-based regulation regime for insurers in Europe scheduled to come into effect in 2013.
About 66 percent of W&W is owned by the Wuestenrot Stiftung foundation, 7.8 percent is publicly traded and the rest is held by financial institutions including Landesbank Baden- Wuerttemberg, Italian lender UniCredit SpA and Zurich-based reinsurer Swiss Reinsurance Co.
To contact the reporter on this story: Oliver Suess in Munich at firstname.lastname@example.org