Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERG ER REGISTRY, 1049 Brussel,  BELGIË 
 
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION 
Brussels, 18.10.2017  
C(2017) 7116 final 
  
 
To the notifying party:  
 
Subject: Case M.8617 - Allianz / LV general insurance businesses 
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 13 September 2017, the European Comm ission received not ification of a 
proposed concentration pursu ant to Article 4 of the Merger Regulation by which 
Allianz SE ("Allianz" or "the Notifyi ng Party") (through its affiliate Allianz 
Holdings plc) acquires within the mean ing of Article 3(1)(b) of the Merger 
Regulation sole control of the UK gene ral non-life insurance businesses ("the 
Target") of Liverpool Victoria Friendl y Society Limited ("LV") by way of 
purchase of shares.3 (Allianz and the Target are designated hereinafter as the 
"Parties"). 
1. THE PARTIES  
(1) Allianz is a global financial services provider headquartered in Munich and 
listed on the Frankfurt Stock Excha nge, providing financial services 
predominantly in the field of life and non-life insurance and asset management.  
                                                 
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 replacement of 'Community' by 'Union' and 'common ma rket' 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 312 , 20.09.2017 , p. 8. PUBLIC VERSION 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 Where possible the information omitted has been replaced by ranges of figures or a 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 (2) The Target is the UK non-life (i.e. motor,  property, liability, travel and pet) 
general insurance and legal services businesses of LV, a UK mutual society 
providing a range of life and non-life insurance products. 
2. THE CONCENTRATION  
(3) Allianz's acquisition of sole control over the Target (the "Transaction") is laid 
out in two agreements, i.e. an Agreement for the Sale and Purchase of Shares in 
the Target ("SPA") and a Shareholders ' Agreement ("SHA"), both signed on 
4 August 2017. 
(4) The Transaction is to be implemented th rough a series of inte r-conditional steps, 
which will ultimately lead to Allianz ac quiring sole control over the Target. 
(5) The notified operation therefore constitute s a concentration 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 million4. Each of them has an EU-wide turnover in excess 
of EUR 250 million, but they do not achie ve 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. 
4. COMPETITIVE ASSESSMENT  
(7) The Transaction leads to limited horizontal overlaps and vertical links in relation 
to the provision and distribution of non-li fe insurance and reinsurance in the 
UK.5 Only one horizontally affected market (the potential market for the 
provision of pet insurance in the UK) a nd, potentially, two vertically affected 
markets (the provision of pet insurance in the UK in connection with (i) the 
distribution of non-life insura nce (ii) the provision of reinsurance) arise as a 
result of the Transaction. Only these three markets will be discussed in Sections 4 and 5 below.  
4.1. Relevant product markets 
(8) In previous cases rela ting to the insurance sector, the Commission has 
distinguished the market for the provisi on of insurance into three broad product 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
5  The Target is only active in the UK. 
 
3 categories: life insurance, non-life insurance and reinsurance.6 The Commission 
has also considered a separate market for insurance distribution.7 
4.1.1.  Non-life insurance (and in particular pet insurance) 
4.1.1.1.  Product market definition 
(9) Within the market for non-life insuran ce, the Commission ha s considered in 
previous cases that, from a demand side pe rspective, the market could be further 
segmented based on the type of risk cove red. On this basis, the Commission has 
previously considered a possible dist inction between: (i) motor vehicle, 
(ii) property, (iii) credit a nd suretyship, (iv) liabilit y, (v) accident and sickness, 
(vi) marine, aviation and transport (" MAT") and (vii) and travel insurance.8  The 
Commission has also previously obser ved that, since the conditions for 
insurance of certain types of risks ar e quite similar and most large non-life 
insurers are active in several types of ri sk coverage, there can be a degree of 
supply-side substitution between differ ent types of non-life insurance products.9  
Ultimately, the Commission left th e precise market definition open. 
(10) The Commission has not previously cons idered a market as narrow as the 
provision of pet insurance.  The Notify ing Party explains such a market, should 
it exist, would comprise cover against the costs of medical treatment required 
for pets and liability in the event of the policy-holder’s pet causing harm to a 
third party. In view of these characteristic s, and of their similarities with other 
types of personal liability insurance, th e Commission considers that the market 
for the provision of pet insurance, should it  exist, may also be considered part of 
a broader product segment covering more types of risks within the non-life 
insurance segment.  
(11) However, for the purpose of the pres ent decision, the exact product market 
definition in relation to non-life insurance (or its s ubsegments, including the 
narrow hypothetical market for pet insurance) can be left open as the Transaction does not raise serious doubts as to its compatibility with the internal 
market under the narrowest plausible market definition giving rise to the largest overlap between the Parties. 
4.1.1.2.  Geographic market definition 
(12) In past decisions, the Commission ha s considered that non-life insurance 
markets are likely to be national in scope , with a few exceptions, such as large 
                                                 
6  Case COMP/M.6957 - IF P&C/ TopDanmark; Ca se COMP/M.6217 Baloise Holding/Nateus/Nateus 
Life; Case COMP/M.6053 CVC/Apollo/Brit Insurance; and Case COMP/M.4284 AXA/Winterthur. 
7  Case COMP/M.6957 - IF P&C/ TopDanmark; Case  COMP/M.6053 CVC/Apollo/Brit Insurance; Case 
COMP/M.4284 AXA/Winterthur; and Case COMP/M.3395 Sampo/If Skadeförsäkring.  
8  Case COMP/M.4284 AXA/Winterthur; Case COMP/M.4701 Generali/PPF Insurance Business. 
9  Case COMP/M.6957 - IF P&C/ TopDanmark; Ca se COMP/M.6053 CVC/Apollo/Brit Insurance; and 
Case COMP/M.4284 AXA/Winterthur.  
 
4 commercial risks, for which the geographi c scope is likely to be wider than 
national.10  Ultimately, the Commission left the precise market definition open. 
(13) The Notifying Party does not propose any alternative geographic market 
definition. 
(14) In any event, for the purpose of the present decision, the exact geographic 
market definition can be left open as the Transaction does not raise serious 
doubts under any plausible market definition.  
4.1.2.  Reinsurance 
4.1.2.1.  Product market definition 
(15) Reinsurance consists in providing insuran ce cover to another insurer for some or 
all of the liabili ties assumed under its insu rance policies, in orde r to transf er risk 
from the insurer to the reinsurer.11 
(16) In its past decisional practice, the Commi ssion has considered a separate market 
for reinsurance (distinguished from the markets for the provision of life and 
non-life insurance), but has left the que stion as to whether the reinsurance 
market should be further segmented between life and non-life reinsurance open.
12 
(17) The Notifying Party does not propose any al ternative product market definition. 
(18) In any event, for the purpose of the present decision, the exact product market 
definition for reinsurance, in particular whether there can be a market for reinsurance or pet insurance, or a broade r market including at least reinsurance 
of personal liability insurance can be left open as the Transaction does not raise serious doubts under the narrowest plausibl e market definition giving rise to the 
largest overlap between the Parties.  
4.1.2.2.  Geographic market definition 
(19) The Commission has previously considered  the market for reinsurance to be 
global in scope, due to the need to pool risks on a worldwide basis.
13 
(20) The Notifying Party does not propose any alternative geographic market 
definition.  
                                                 
10  Case COMP/M.4284 AXA/Winterthur; Case CO MP/M.5010 Berkshire Hathaway / Munich RE / 
GAUM. 
11 Case COMP/M.6521 - Talanx International /Meiji Yasuda Life InsuranceE / Warta. 
12  Case COMP/M.5925 MetLife / Alico / Delam; Case COMP/M.5083, Groupama / OTP Garancia; Case 
COMP/M.6053 CVC / Apollo / Brit Insurance. 
13 Case COMP/M.5925 MetLife / Alico / Delam; Ca se COMP/M.5083, Groupama / OTP Garancia; Case 
COMP/M.4059 Swiss Re / GE Insurance Solutio ns; Case COMP/M.6053 CVC / Apollo / Brit 
Insurance. 
 
5 (21) The Commission considers that there ar e no elements that would point to a 
different geographic scope than worldwide, in line with its fi ndings in previous 
decisions.  
4.1.3.  Insurance distribution 
4.1.3.1.  Product market definition 
(22) In previous cases, the Commission ha s considered the existence of a 
downstream market for insurance distribution.14 The Commission has previously 
analysed whether the market for insurance distribution comprises only outward distribution channels or whether it should al so be considered to include the sales 
force and office networks of  the insurer (i.e. direct sales). This question was 
ultimately left open.
15 The Commission has also considered whether a 
distinction could be made between the market for the distribution of life and 
non-life insurance products,16 but ultimately left the market definition open in 
this respect.   
(23) The Notifying Party does not propose an al ternative product market definition.  
(24) In any event, the for the purpose of the present decision, the exact product 
market definition for insurance distributi on can be left open as the Transaction 
does not raise serious doubts under a ny plausible market definition.  
4.1.3.2.  Geographic market definition 
(25) The Commission has previously recognise d the national nature of insurance 
distribution channels. 17 It however ultimately left the exact definition open with 
respect to the question in particular as to whether the relevant geographic market 
could be wider than national.  
(26) The Notifying Party does not propose any alternative geographic market 
definition.  
(27) In any event, the for the purpose of the present decision, th e exact geographic  
market definition (national or wider) fo r insurance distribution can be left open 
as the Transaction does not raise seri ous doubts under any a lternative market 
definition.  
                                                 
14  See COMP/M.4284 AXA/Winterthur, COMP/M.6957 IF P&C/Topdanmark. 
15   See COMP/M.6957 IF P&C/Topdanmark, COMP/M.6053 CVC/Apollo/Brit Insurance. 
16  See COMP/M.6957 - IF P&C / TOPDANMARK. 
17  See COMP/M.6957 IF P&C/Topdanmark, COMP/M.6053 CVC/Apollo/Brit Insurance. 
 
6 4.2. Competitive assessment 
4.2.1.  Horizontal assessment  
(28) Based on the considerations  on market definition above, under the narrowest 
plausible market definition, the Transacti on gives rise to only one horizontally 
affected market, namely the hypotheti cal market for the provision of pet 
insurance in the UK. Under any other pl ausible market definition, no affected 
markets would arise. 
Notifying Party's view 
(29) The Notifying Party claims that, in a possible market for the provision of pet 
insurance in the UK, the Transaction does not raise competition concerns, as the Parties' combined share is nearly id entical to Allianz's market share pre-
Transaction given that the Target only represents a de minimis  part of the UK 
pet insurance market. As a result, according to the Notifying Party, the Transaction will not bring about any meani ngful change to the structure of the 
pet insurance market pre-Transaction.  
Commission's assessment 
(30) In a potential market confined to the pr ovision of pet insura nce in the UK, the 
combined market share of the Parties reaches [40-50]%, with an increment 
brought by the Target of [0-5]%.   
(31) The Commission considers that, although th e Parties' combined market shares 
are significant; the increment brought by th e Target is neglig ible. Hence, the 
Parties' combined market position will be  determined for its near entirety by 
Allianz's position in the market pre-Transa ction ([40-50]%).  In this respect, the 
Commission agrees with the Notifying Party's claim that the Transaction will not bring any significant change to the cu rrent structure of the market. This is 
further demonstrated by the HHI delta brought about by the Transaction, which 
only amounts to 29, well below the 150 threshold.
18 
(32) Furthermore, post-Transaction Allianz will continue to face virtually unchanged 
competition in the UK pet insurance market, notably from RSA Insurance ([30-40]%) as well as from Direct Line Group ([5-10]%) and E&L 
Insurance ([0-5]%). 
(33) Based on the above cons iderations, the Commissi on concludes that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market in relation a possible market  for pet insurance in the UK.  
                                                 
18  Guidelines on the assessment of horizontal merg ers under the Council Regul ation on the control of 
concentrations between undertakings (the "Horizontal Merger Guidelines"), paragraph 20.  
 
7 4.2.2.  Vertical relationships 
(34) The Transaction also leads to two potentia l vertically affected markets, namely: 
(a) the provision of pet insurance in the UK (upstream) and the distribution of 
non-life insurance in the UK (downstream) 
(b) the provision of reinsurance (upstrea m) and the provision of pet insurance 
in the UK (downstream). 
(35) In this respect, the Notifying Party ar gues that, for the purpose of assessing the 
vertical links between the Parties’ insuran ce activities and Alli anz’s activities as 
a reinsurer and distributor, it is excessively narrow to confine the relevant insurance market to the supply of pet in surance, given that the activities of 
reinsurers and insurance distributors (b rokers) are not generally limited to pet 
insurance only, but comprise a much wi der portfolio of products.  In this 
respect, the Notifying Party claims that, to  assess the vertical  links, it would be 
more appropriate to consider the gene ral UK non-life insurance market or, on at 
a narrower level, the UK market comp rising insurance cover for personal 
financial loss, which includes personal liability insurance as well as pet 
insurance. Under any such alternative ma rket definition, no ve rtically affected 
markets would arise. 
(36) The Commission considers that the appr oach suggested by the Notifying Party 
could be plausible in this case. Howeve r, it does not consider it necessary to 
reach a conclusion on this point, as no co mpetition concerns will arise as a result 
of the Transaction even if a particularly  narrow market for the provision of pet 
insurance in the UK is considered for the purposes of a ssessing the relevant 
vertical links.  
4.2.2.1.  Vertical link between the provision of pet insurance in the UK and the 
distribution of non- life insurance in the UK 
Notifying Party's view 
(37) As explained above, both Parties are active on the upstream market for the 
provision of pet insurance in the UK (Allianz has a [ 40-50]% market share while 
the Target has a [0-5]% market share). Bo th Parties are also active on the market 
for the distribution of non-life insurance in the UK (Allianz has a market share 
of [0-5]% and the Target has a market share of [0-5]%).  
(38) The Notifying Party argues that there is  no possibility of the competitive 
position of any distributor of non-life in surance being harmed in a scenario 
where the distribution of the Target’s pet insurance is diverted to Allianz’s own distributors following the implementati on of the Transaction. The Notifying 
Party explains that this would not repres ent a material loss of business to any 
current distributor of LV pet insurance
19, given that [details on Target's 
activities].  
                                                 
19  Only Allianz (and not the Target) is engaged in th e provision of “outward-only” insurance distribution, 
through its owned brokers, Home & Legacy and ABSL.   
 
8 Commission's assessment 
(39) The Commission considers that post-Tran saction, Allianz would not have the 
ability to foreclose its down stream or upstream rivals.  
(40) Indeed, as regards potential input foreclosure ( i.e. the merged entity's pet 
insurance arm restricting access to its products for its competitors on the downstream distribution market post-merg er), the Commission notes that pet 
insurance appears to be included in dist ribution agreements together with other 
non-life insurance products (these woul d include, e.g. insurance for property, 
marine, aviation and transport, moto r vehicle, liability, travel etc.).
20 Therefore 
pet insurance could not be seen as a key input for the merged entity's competitors on the market for the distribu tion of non-life insurance. In addition, 
the increment brought about by the Target is very sma ll (less than [0-5]%), both 
on the market for pet insurance and on th e market for the distribution of non-life 
insurance. Therefore there are no co mpetitive concerns related to input 
foreclosure issues.  
(41) Concerning possible customer foreclosure ( i.e. the merged entity's non-life 
insurance distribution arm only distributin g its own pet insurance products, in 
order to deprive other pet insurance providers of sufficient distribution 
capability), the Commission notes the ve ry limited market presence of the 
Parties on the market for the distribution of non-life insurance and the presence 
of larger distributors. Thus in this case there would be sufficient alternative 
distributors for competing pet insurance pr oviders to turn to. Therefore there are 
no competitive concerns related to customer foreclosure issues.  
4.2.2.2.  Vertical link between the provision of reinsurance and the provision of pet 
insurance  
Notifying Party's view 
(42) The Notifying Party submits that no competition concerns will arise from the 
vertical relationship between Parties’ activities on the markets for the provision 
of pet insurance in the UK and re insurance for the following reasons. 
(43) First, according to the Notifying Party, only Allianz (and not the Target) is 
active in the provision of reinsurance, [d etails on Allianz's activities] and that 
therefore any competitive effects aris ing from the link between Allianz’s 
activities as a reinsurer and the Parties’  combined activities in the downstream 
market for the provision of pet insurance will not be affected by the Transaction.  
In this regard, the Notifying Party also notes that (i) the vertical relationship 
between Allianz’s reinsurance activities a nd its activities as a pet insurer already 
exists pre-Transaction and that (ii) the very small increment brought by the 
Target to Allianz's existing share in the market for the provision of pet insurance 
will not have any practical impact on this pre-existing relationship. 
(44) Furthermore, the Notifying Party submits  that there is no prospect of the 
competitive position of any operator on the global reinsurance market being 
                                                 
20  In addition, there appear to be no specialised brokers for pet insurance.  
 
9 harmed in a hypothetical scenario where the provision of re insurance for the 
Target’s limited pet insurance portfolio is  diverted to Allianz’s own reinsurance 
business following the implementation of the Transaction.  Moreover, the Notifying Party notes that this would not  represent a loss of business to any 
current provider of reinsurance to LV, gi ven that [details on Target's activities]. 
Commission's assessment 
(45) First, the Commission considers, in agreem ent with the Notifying Party's claim, 
that this vertical link is pre-existing as Allianz is active both upstream in the market for reinsurance with a share of [0-5]% and downstream in the market for 
the provision of pet insurance in the UK ([40-50]%), while the Target is only 
active downstream ([0-5]%). As such, th e Transaction does not bring about any 
change in the structure of the market, ot her than a negligible increment in the 
downstream market for the provision  of pet insurance in the UK.  
(46) Furthermore, the Commission considers that post-Transac tion, Allianz would 
not have the ability to foreclose it s downstream or upstream rivals.  
(47) Indeed, as regards potential input for eclosure (i.e. the merged entity only 
reinsuring its own pet insurance products ), the Commission notes that Allianz's 
current very limited market share in rein surance would make it difficult for it to 
foreclose its competitors on the pet insurance market. In addition, the 
Commission notes the presence of much larger competitors than Allianz on the global reinsurance market to which Allianz's rivals in the downstream market for pet insurance could turn to. Finally the Commission notes that [details on Target's activities] which is an indi cation that reinsura nce may not be an 
important service for pet insurance providers. 
(48) As for customer foreclosure (i.e. the merged entity's pet insurance arm only 
using Allianz's reinsurance services), the Commission notes that reinsurance involves the pooling of a very wide range of risks on a worldwide basis.
21 
Therefore there are sufficien t alternative insurers for the reinsurance companies 
to supply. Therefore under th is scenario the merged ent ity would not restrict the 
access of its competitors' in the reinsurance market to a significant customer base.  
(49) Therefore there are no competitive concer ns related to input foreclosure nor 
customer foreclosure issues.   
Conclusion 
(50) In view of the above and of all the eviden ce available to the Commission, the 
Commission considers that th e Transaction does not rais e serious doubts as to its 
compatibility with the internal market w ith respect to the vertical link between 
(i) the provision of pet insurance in the UK and the distribution of non-life insurance in the UK and (ii) the provisi on of reinsurance and the provision of 
pet insurance in the UK.  
                                                 
21  Furthermore, reinsurers do not a ppear to specialise in pet insurance. 
 
10 5. CONCLUSION  
(51) For the above reasons, the European Co mmission 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) 
Julian KING  Member of the Commission