Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229- 91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu.   EUROPEAN COMMISSION  
Brussels, 26.09.2019  
C(2019)  7027 final  
PUBLIC VERSION 
 
To the notifying party 
Subject : Case M. 9432 – Allianz Holdings/Legal and General Insurance  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 22 August 2019, the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by  which Allianz 
Holdings plc (“Allianz” or  the “Notifying Party”, the United Kingdom ), acquires 
sole control over  Legal and General Insurance Limited (“L&G Insurance” or the 
“Target”, the United Kingdom ) by way of purchase of share s.3 Allianz and L&G 
Insurance  are hereinafter collectively referred to as the “Parties”.  
                                                 
∗  Handling instructions for SENSITIVE information are given at https://europa.eu/!dg43PX.  
1  OJ L 24, 29.1.2004, p. 1 (the “ Merger Regulation” ). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the replacemen t of 
“Community ” by “Union ” and “common market ” by “internal market” . The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 291,  29.08.2019 , p. 8. 
In the published version of this decision, 
some information has been omitted pursuant 
to Article 17(2) of Council Regulation (EC) 
No 139/2004 concerning non- disclosure of 
business secrets and other  confidential 
information. The omissions are shown thus 
[…]. Where possible the information 
omitted has been replaced by ranges of 
figures or a general description.  
 
 
2 1. THE PARTIES  
(2) Allianz  is part of the Allianz group, a global financial services provider 
headquartered in […]* , Germany, and active predominantly in relation to life 
insurance products and non- life insurance products (including pet insurance), as well 
as asset management;  
(3) L&G Insurance  is the general insurance business of the Legal and  General Group  plc 
and provides non- life insurance products (including pet insurance)  in the UK .  
2. THE CONCENTRATION  
(4) On 31 May 2019, Legal and General Assurance Society Limited (which is wholly 
owned by Legal and  General Group plc) entered into a share purchase agreement 
with Allianz pursuant to which Allianz agreed to acquire 100% of the shares of the 
Target  (the “Transaction”) .  
(5) The Transaction therefore constitutes a concentratio n within the meaning of 
Article  3(1)(b) of the Merger Regulation.  
3. EU DIMENSION  
(6) The undertakings concerned have a combined aggregate world- wide turnover of 
more than EUR 5 000 million (Allianz: EUR 132 483 million, L&G Insurance: 
EUR  […] million)4. Each of them has a n EU-wide turnover in excess of 
EUR  250 million  (Allianz: EUR [ …] million, L&G Insurance: EUR [ …] million) , 
but they do not achieve more than two -thirds of their aggregate EU -wide turnover 
within one and the same Member State. The notified operation therefore has an EU 
dimension pursuant to Article 1(2) of the Merger Regulation.  
4. MARKET  DEFINITION  
(7) The Transaction gives rise to limited horizontal overlaps and vertical links, in the 
UK, in relation to the provision and distribution of non- life insurance, and 
reinsurance.5  In previous decisions relating to the insurance sector, the Commission 
distinguished three broad categories of insurance products: life insurance, non- life 
insurance, and reinsurance.6 The Commission also considered a distinct market for 
insurance distribution.7 
                                                 
* Should read “Munich”.  
4  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
5  L&G Insurance is only active in the UK.  
6  Cases M.6957 –  IF P&C/TopDanmark ; M.6217 –  Baloise Holding/Nateus/Nateus  Life. 
7  Cases M.6957 –  IF P&C/Topdanmark ; M.6053 – CVC/Apollo/Brit Insurance . 
 
 
3 4.1 Non-life insurance  
4.1.1 Previous decisional practice  
(8) As regards product market definition, in previous cases, the Commission observed 
that there were indications of a potential degree of supply -side substitutability 
between different types of non- life insurance products: the conditions for insurance 
of certain  types of risks are quite similar and most large non- life insurers are active 
in several types of risk coverage .8 However, the Commission also considered that, 
from a demand side perspective, the characteristics and purpose of the different types 
of insurance are distinct, and that there i s typically no substitutability between 
different types of insurance from a customer perspective. Therefore, the Commission 
envisaged to segment the market based on the type of risk covered, distinguishing 
notably the following segments: (i) motor vehicle,  (ii) property, (iii) credit and 
suretyship, (iv) liability, (v) accident and sickness, (vi) marine, aviation and 
transport ( “MAT ”), and (vii) and travel insurance .9 In certain decisions, the 
Commission also distinguished additional segments, such as fire insurance10 or legal 
assistance11. 
(9) In case M.8617 – Allianz /LV General Insurance Businesses , the Commission also 
envisaged a distinct market segment for the provision of pet insurance ,12 which 
comprises cover against the costs of medical treatment required f or pets and liability 
in the event that the policy holder’s pet causes harm to a third party. However, the 
Commission also stated that, given the similarities with other types of personal 
liability insurance, the provision of pet insurance could be part of  a broader market 
covering more types of risks within the non- life insurance market.  
(10) In addition to the above, in its past decisional practice, the Commission considered 
several alternative segmentations of the non -life insurance market. In particular, the  
Commission envisaged to further segment the market based on the applicable 
national insurance classification.13 A further distinction could also be made between 
individual and group customers.14  
(11) The Commission ultimately left open the precise product marke t definition for non-
life insurance products.  
(12) As regards geographic market definition, the Commission has previously considered 
that the market for non- life insurance and its potential sub- segments are likely to be 
national in scope, with a few exceptions, such as MAT and large commercial risks, 
for which the geographic scope is likely to be wider than national.15 Ultimately, the 
Commission left the precise geographic market definition open. 
                                                 
8  Cases M.6957 –  IF P&C/TopDanmark  and M.6053 – CVC/Apollo/Brit Insurance . 
9  Cases M.4284 –  AXA/Winterthur ; and  M.4701 – Generali/PPF Insurance Business . 
10  Case M.4844  – Fortis/ABN Am ro Assets.  
11  Case M. 8905 – Axa Group / Roland.  
12  Case M.8617 –  Allianz /LV General Insurance Businesses . 
13 Case M.6649  – Allianz /Insurance Portfolio and Brokerage Services of Gan Eurocourtage . 
14  Case M.8257  – NN Group/Delta Lloyd.  
15  Cases M.8617 –  Allianz/LV General Insurance Business  and M.4284 – AXA/Winterthur . 
 
 
4 4.1.2 Notifying Party’s views  
(13) The Notifying Party submits  that there is a  single overall market for the provision of 
non-life insurance, which is national in scope, but considers that the exact 
delineation of the relevant product and geographic market can be left open.  
4.1.3 Commission’s assessment  
(14) The results of the market investigation suggest the existence of a distinct market for 
the provision of pet insurance. For instance, all competitors consider that pet 
insurance is a separate business line, notably  on the ground that it requires “ different 
underwriting knowledge and skills ” and dedicated personnel.16 Moreover, although 
pet insurance products may be included in distribution contracts together with other 
non-life insurance products, they seem to be typically sold on a stand- alone basis.17 
(15) In any  event, for the purpose of the present decision, the exact product and 
geographic market definition for the provision of non- life insurance can be left open 
as the Transaction does not raise serious doubts as to its compatibility with the 
internal market u nder any plausible market definition. 
4.2 Reinsurance 
4.2.1 Previous decisional practice  
(16) Reinsurance consists in providing insurance cover to another insurer for some or all 
of the liabilities assumed under its assurance policies, in order to transfer the risk 
from the insurer to the reinsurer.18 
(17) As regards product market definition, in its past decisional practice, the Commission 
considered a separate market for reinsurance, but has left open the question as to 
whether this market should be further segmented between life and non- life 
reinsurance.19  
(18) As regards geographic market definition, the Commission has previously considered 
the reinsurance  market to be global in scope, due to the need to pool risks on a 
worldwide basis.20  
4.2.2 Notifying Party’s views  
(19) The Notifying Par ty does not propose any alternative product and geographic market 
definition for reinsurance and consider that the exact delineation of the relevant 
market can be left open.  
                                                 
16  See replies to question 4 of pre -notification request for information to pet insurance competitors and 
replies to question 4 of questionnaire to competitors.  
17  See replies to question 5  of pre -notification request for information to pet insurance competitors; replies to 
question 5 of questionnaire to competitors; and replies to question 8 of questionnaire to retailers.  
18  Case M.8617 –  Allianz /LV General Insurance Businesses , para. 15.  
19  Cases M.6053 –  CVC/ Apollo/Brit Insurance  and M.5925 – MetLife/Alico/Delam . 
20   Case s M.6053 – CVC/Apollo/Brit Insurance ; M.5925 – MetLife/Alico/Delam ; and M.5083 – 
Groupama/OTP Garancia.  
 
 
5 4.2.3 Commission’s assessment  
(20) For the purpose of the present decision, the Commission considers that there is no 
reason to depart from the past decisional practice and that the exact product and 
geographic market definition for reinsurance can be left open as the Transaction does 
not raise serious doubts under any plausible market definition. 
4.3 Insurance distribution  
4.3.1 Previous decisional practice  
(21) As regards product market definition, in past decisions, the Commission has 
considered the existence of a separate downstream market for insurance distribution 
(distinct from the upstream provision of insurance) .21 The Commission has 
previously analysed whether the market for insurance distribution comprises only 
outward distribution channels or whether it should also be considered to include the 
sales force and office networks of the insurer ( i.e. direct sales). This question was 
ultimately left open.22 The Commission has also considered whether a distinction 
could be made between the market for the distribution of life and non- life insurance 
products,23 but ultimately left the market definition open in this  respect.  
(22) As regards geographic market definition , the Commission has previously recognised 
the national nature of insurance distribution channels, but ultimately left open the 
question as to whether the relevant geographic market could be wider than nati onal. 
4.3.2 Notifying Party’s views  
(23) The Notifying Party does not propose any alternative product and geographic market 
definition for insurance distribution and considers that the exact delineation of the 
relevant market can be left open.  
4.3.3 Commission’s assessment  
(24) For the purpose of the present decision, the Commission considers that there is no 
reason to depart from the past decisional practice and that the exact product and 
geographic market definition for insurance distribution can be left open as the 
Transactio n does not raise serious doubts under any plausible market definition. 
5. COMPETITIVE ASSESSMENT  
5.1 Assessment  of horizontally affected market s 
(25) Based on the considerations on market definition above, under the narrowest 
possible market definition, the Transaction gives rise to only one horizontally 
                                                 
21  Cases M.6957 –  IF P&C/TopDanmark ; M.6053 –  CVC/Apollo/Brit Insurance ; and M.4284 – 
AXA/Winterthur . 
22   Cases  M.6957 – IF P&C/Top Danmark , and M.6053 – CVC/Apollo/Brit Insurance . 
23  Case M.6957 – IF P&C/Top Danmark . 
 
 
6 affected market, namely the potential market for the pr ovision of pet insurance in 
the UK.24  
5.1.1 Notifying Party ’s view s 
(26) The Notifying Party submits  that the overlap with the Target’s  activities does not 
give rise to competition concerns notably on the grounds that (i) L&G Insurance is 
not a material player in this market; (ii) the combined market share of the Parties 
[…]; (iii) there are a large number of competitors, including severa l new entrants 
over the last years and many players with market shares higher than L&G 
Insurance’s; and (i v) the Parties are not close competitors.  
5.1.2 Commission ’s assessment  
(27) The market shares of the Parties and their main competitors in the potential market 
for pet insurance in the UK are set out in the table below. 
 PROVISION OF PET INS URANCE IN THE UK (2018)  
 Market share in value  
(gross written premiums ) Market share in volume  
(number of pets insured)  
Allianz  [40-50]% [30-40]% 
L&G Insurance  [0-5]% [0-5]% 
Combined  [40-50]%  [30-40]%  
RSA  [20-30]% [10-20]% 
Animal Friends  [10-20]% [5-10]% 
Direct Line  [5-10]%  [0-5]% 
E&L  [0-5]% [0-5]% 
Cardif Pinnacle  [0-5]% [0-5]% 
Aviva  [0-5]% [0-5]% 
Great Lakes  [0-5]% [0-5]% 
Other  [5-10]% [20-30]% 
Source : ABI and Allianz estimates  
(28) In the UK pet insurance market in 2018, the Parties had a combined value market 
share of [40- 50]% ([30- 40]% in volume), with a modest increment of [0 -5]% 
brought by L&G Insurance ( [0-5]% in volume). Although the Parties’ combined 
mark et share is significant, this is largely attributable  to Allianz’s pre -existing 
market share. Therefore, the Transaction is unlikely to bring any significant change 
to the current structure of the market.  
(29) Moreover, according to the Parties’ forecasts, thei r combined (value) market share is 
likely to decline from [40- 50]% in 2018 to [40- 50]% in 2021. Indeed , although L&G 
insurance’s market share is expected to increase over this period (+[0 -5]%), this will 
be largely compensated by the decrease in Allianz ’s market share ( -[5-10]% over the 
same period of time). The projected decline in Allianz’s market share is  due notably 
to a regulatory change introduced recently (in late 2018) according to which 
[INFORMATION ABOUT IMPACT OF REGULATORY CHANGES THAT 
                                                 
24  The other horizontal overlaps between the activities of the Parties in relation to the provision an d 
distribution of non -life insurance  in the UK do not give rise to affected markets, the Parties’ combined 
market shares being well below 20% under any plausible market definition.  
 
 
7 HAVE LIM ITED ALLIANZ’S ABILITY TO SELL THROUGH CERTAIN 
CHANNELS].25 
(30) Post-Transaction, the Parties would continue to face several competitors, including 
RSA ( [20-30]% in value), Animal Friends ( [10-20]% in value), and Direct 
Line ([5-10]% in value), as well as sever al smaller players.  
(31) In this respect, the evidence collected during the market investigation indicates that 
small providers of pet insurance are credible competitors, thanks notably to price 
comparison websites and to limited barriers to expand. As a compe titor put it, small 
players “can operate efficiently and scale quickly ”.26 This argument is also supported 
by the fact that Allianz recently lost a tender process by a UK supermarket chain to 
underwrite pet insurance policies under their brand name to a sma ll competitor 
(Cardif Pinnacle).  
(32) A limited number of respondents to the market investigation raised concerns about 
the Transaction. In particular, one  competitor claimed that, as a result of the 
Transaction,  the Parties  would have a particular advantage d ue to an unrivalled 
wealth of customer data, making it difficult for competitors, especially new entrants 
without sufficient data, to profitably compete in the UK market for pet insurance. In 
this respect, the Commission notes that this competition concern  is largely 
unsubstantiated. On the one hand, given L&G Insurance ’s limited market position, 
Allianz’ s customer database will not significantly increase as a result of the 
Transaction . On the other hand, during the last five  years , several new players 
entered the market  as well as small competitors increased their market share, 
suggesting that data may not be an essential input .27  
(33) The Commission also investigated the claim of one respondent  to the market 
investigation , according to which  post-Transactio n, the combined entity could 
benefit of its size in the pet insurance market to price competitors out of the market 
by lowering prices below a profitable level and then raise prices again. The evidence 
in the Commission’s file does not support  the above cl aim. In particular , the results 
of the market investigation revealed that barriers to entry/expand in the UK market 
for pet insurance are low,  with practically no capacity constraints, and that p et 
insurance is largely substitutable with other non- life ins urance products, from a 
supply side perspective .28 It follows that competitors having exited the pet insurance 
segment because of the predatory pricing, or other insurers active in other non- life 
insurance market segments , are likely to enter (or  to re -enter) this market segment 
when the predator raises prices again . The above would limit the ability of the 
                                                 
25  See notably pre- notification request for information to pet insurance co mpetitors.  
26  See replies to question 9 of pre -notification request for information to pet insurance competitors; replies to 
question 9 of questionnaire to competitors; and replies to question 13 of questionnaire to retailers.  
27  For instance, according to  the Parties’ estimates, Great Lakes with its brand “Bought by many” entered the 
market in 2017 and increased its market share by 50% over the last three years, while the pet insurance 
market in the UK overall grew by 22% during that time. Over the last fi ve years (2014 -2019), […]* 
(including the Target)  entered the market for pet insurance in the UK (see the Parties’ reply to question 2 
of RFI 3).  
28  See notably replies to question 9 of pre -notification request for information to pet insurance competitors; 
replies to question 9 of questionnaire to competitors; and replies to question 13 of questionnaire to 
retailers.  
*  Should read “eight new insurers”.  
 
 
8 combined entity to implement a predatory pricing strategy . Moreover , as previously 
mentioned, the increment in market share being modest, the Transaction would not 
bring any significant change to the current structure of the market.  Additionally , the 
Commission notes that the above concern  contrasts with Allianz’s current market 
position rather at the high- end in terms of value in pet insurance. Consequent ly, 
overall , trying to outprice competitors in the UK pet insurance market would seem to 
be unprofitable and ultimately counter -productive .  
(34) Based on the above considerations , which are supported by the results of the  market 
investigation, the Commission c oncludes that the Transaction does not raise serious 
doubts as to its compatibility with the internal market in relation to the provision of 
pet insurance in the UK.  
5.2 Assessment  of vertically affected markets  
(35) The Transaction also leads to the following pot ential vertically affected markets:  
- the ( upstream ) provision of pet insurance in the UK and the ( downstream ) 
distribution of non- life insurance in the UK  
- the ( upstream ) provision of reinsurance at global level and the ( downstream ) 
provision of pet insurance in the UK.  
5.2.1 Vertical link between the provision of pet insurance (UK) and the distribution of 
non-life insurance (UK)  
(36) In the UK, both Parties are active on (i) the possible (upstream) market for the 
provision pet insurance and (ii) the (downstream) marke t for the distribution of non -
life insurance. These vertically related markets are affected as a result of the Parties’ 
combined market share in the UK pet insurance market (see table below).  
 PARTIES ’ (VALUE ) MARKET SHARES IN THE UK (2018)  
 Pet insurance  market  
(upstream)  Non-life insurance Distribution29 
(downstream)  
Allianz  [40-50]%  [0-5]% 
L&G Insurance  [0-5]%  < [0-5]% 
Combined  [40-50]%  < [0-5]% 
Source : ABI and Allianz estimates  (upstream) / Global Data UK and SFCR (downstream)  
5.2.1.1 Notifying Party’s  views  
(37) The Notifying Party’s  submit s that, in line with the Commission’s findings in 
Allianz/LV General Insurance Businesses,30 the above vertical link does not give rise 
to any foreclosure risk. First , it is claimed that the combined  entity would not have 
the ability or incentives to foreclose downstream rivals on the grounds that (i) the 
Parties’ pet insurance products do not constitute an essential input for downstream 
distributors and (ii) L&G Insurance is not a material player on the upstream market. 
Second, it is argued that the risk of customer foreclosure can be excluded since 
                                                 
29  Including the distribution of their own products and third -party insurance products.  
30  Case M.8617 –  Allianz/LV General Insurance Businesses . 
 
 
9 (i) the Parties’ downstream market shares are marginal and (ii) L&G Insurance does 
not distribute third party insurance products.  
5.2.1.2 Commission’s assessment  
(38) The Commission  considers  that, post -Transaction, the combined entity is unlikely to 
have the ability to foreclose its downstream or upstream rivals for several reasons.  
(39) As regards potential input foreclosure , the increment brought by the Transaction on 
the potential pet insurance market in the UK is  indeed  very small ( [0-5]% in value, 
[0-5]% in volume). Therefore, the Transaction is  unlikely to change the current 
structure of the market. Moreover, subject to limited exceptions, the pet insurance 
products provided by the Parties are only sold through direct channels31 and, 
therefore, do not involve third- party distributors. 
(40) As regards potential customer foreclosure , the Parties are unlikely to have the ability 
to harm upstream rivals given the very limited market presence o f the Parties on the 
downstream market for the distribution of non- life insurance (below [0-5]% 
including both outward distribution channels and direct sales).32 Thus, there would 
remain sufficient alternative distributors for competing pet insurance  providers. 
Moreover, L&G Insurance only distributes its own products, which means that the 
Transaction has no impact on Allianz’s ability to foreclose upstream competitors.   
(41) Based on the above considerations, the Transaction is unlikely to raise serious 
doubts as to its compatibility with the internal market in relation to the vertical link 
between the provision of pet insurance in the UK (upstream) and the distribution of 
non-life insurance in the UK (downstream).  
5.2.2 Vertical  link between the provision of reinsur ance (global) and pet insurance (UK)  
(42) The Transaction also gives rise to a vertical relationship between Allianz’s activities 
on the global market for reinsurance (upstream) and the Parties’ activities on the 
potential UK market for pet insurance (downstream). These vertically related 
markets are affected as a result of the Parties’ combined market share in the UK pet 
insurance market (see table below).  
 PARTIES ’ (VALUE ) MARKET SHARES (2018)  
 Reinsurance (worldwide)  
(upstream)  Pet insurance market (UK)  
(downstream ) 
Allianz  [0-5]% [40-50]%  
L&G Insurance  - [0-5]%  
Combined  [0-5]% [40-50]%  
Source : S&P Global ratings (upstream) / ABI and Allianz estimates  (downstream)  
                                                 
31  The Parties’ direct sales of pet insurance also include policies sold pursuant to “affinity deals” concluded 
with retailers (such as supermarkets). Affinity deals allow insurers to offer policies for sale under t he 
brand of a supermarket or other retailer. The insurance policies are underwritten and sold directly by the 
insurer who handles all aspect of the sales process.  
32  Considering only distribution of third -party insurance products (to the exclusion of direct sales), the 
Parties’ activities do not overlap. Only Allianz distributes third -party insurance product and its market 
share on that segment in the UK is negligible ( [0-5]%). 
 
 
10 5.2.2.1 Notifying Party’s  views  
(43) The Notifying Party  submit s that, in line with the Commission’s findings in 
Allianz/LV General  Insurance Businesses,33 the above vertical link does not raise 
any foreclosure risk on the grounds that (i) Allianz has a de minimis  market share on 
the upstream global market for reinsuran ce, whereas L&G Insurance is not active on 
that market, and (ii) downstream, L&G Insurance accounts for a tiny proportion of 
the overall global demand for reinsurance services.  
5.2.2.2 Commission’s assessment  
(44) The Commission considers that, post -Transaction, the combined entity is unlikely to 
have the ability to foreclose the markets  downstream or upstream for several reasons.  
(45) As regards potential input foreclosure , only Allianz is active on the upstream global 
reinsurance market. Given its negligible market shar e on this market, Allianz would 
be unable to foreclose competitors on the downstream potential UK pet insurance 
market .  
(46) As regards potential customer foreclosure , the Commission notes that reinsurance 
services involve the pooling of a very wide range of r isks on a worldwide basis.34 In 
this respect, the Parties confirmed that, to the best of their knowledge there are no 
reinsurers specialised in pet insurance. The above corroborate s the Parties’ claim that 
L&G Insurance accounts for a tiny proportion of the  total demand for reinsurance 
services. Consequently, the combined entity would not be in a position to restrict the 
access of its upstream rivals to a significant customer base .  
(47) Based on the above considerations, the Transaction does not  raise serious doubts as 
to its compatibility with the internal market in relation to the vertical link between 
the provision of reinsurance at global level (upstream) and the provision of pet 
insurance in the UK (downstream).  
6. CONCLUSION  
(48) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the  EEA Agreement .  
For the Commission 
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission 
                                                 
33  Case M.8617 –  Allianz/LV General Insurance Businesses , para.40 . 
34  Case M.861 7 – Allianz/LV General Insurance Businesses , para. 48.