ERGO Group AG unit ERGO Belgium plans to stop selling new life insurance policies and shutter the sales organization in Belgium and Luxembourg, as part of a new strategic plan aimed at boosting efficiency.
The plan could result in 200 job cuts, the insurer said. ERGO Group will increase ERGO Belgium's capital position by more than €300 million as part of the plan.
"As a consequence of the difficult situation on the capital markets, profitability in life insurance in the Belgian market has significantly deteriorated over the last years," the company said. ERGO Belgium CEO Mark Lammerskitten noted that with just a 3.2% market share in Belgium and Luxembourg, ERGO is a smaller player with "structural disadvantage on the cost side."
Under the new strategy, the company also plans to invest in operational, risk and financial management to make the company more resilient.
ERGO will discuss the strategic plan with the Works Council in Belgium, with implementation of the measures subject to the outcome of the discussions.
ERGO Group is a unit of Munich Re.