CELEX: 32018M8905
Language: en
Date: 2018-07-26 00:00:00
Title: Commission Decision of 26/07/2018 declaring a concentration to be compatible with the common market (Case No COMP/M.8905 - AXA Konzern AG / ROLAND Rechtsschutzversicherungs-AG) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
  In the published version of this decision, some               Brussels, 26.7.2018
  information has been omitted pursuant to Article              C(2018) 5078 final
  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
                                                                       PUBLIC VERSION
  omitted has been replaced by ranges of figures or a
  general description.
                                                                To the notifying party:
Subject:            Case M.8905 - AXA GROUP / ROLAND
                    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 29 June 2018, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of the Merger Regulation by which AXA
          Konzern AG (Germany, "AXA", also referred to as the "Notifying Party"),
          belonging to the AXA Group (France, "Axa Group"), acquires within the meaning
          of Article 3(1)(b) of the Merger Regulation sole control of the whole of
          ROLAND Rechtsschutzversicherungs AG ("Roland", Germany) by way of
          purchase of shares.3 Axa and Roland are designated hereinafter as the "Parties".
1.        THE PARTIES
(2)       AXA Germany is part of the AXA Group, a global insurance group headquartered
          in Paris, France. AXA is active in the provision of life, health and other forms of
          insurance, as well as asset management and reinsurance services.
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 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 239, 9.7.2018, p. 4.
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.
 ---pagebreak--- (3)      ROLAND is a German based insurance company, mainly active in the provision
         of legal protection insurances, accident and breakdown insurances and assistance
         services.
2.       THE CONCENTRATION
(4)      By the proposed concentration, AXA will acquire 60% of the shares in Roland.
         Gothaer Finanzholding AG, Gothaer Lebensversicherung AG and Gothaer
         Allgemeine Versicherung AG (together referred to as "Gothaer") will acquire a
         non-controlling minority share of the remaining 40%. AXA and the Gothaer
         Group have agreed on a corporate governance structure for Roland which will
         afford AXA Germany sole control over Roland.
(5)      The concentration constitutes the acquisition of sole control within the meaning
         of Article 3(1)(b) of the Merger Regulation of the whole of Roland by Axa.
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 achieve more than two-thirds of their
         aggregate EU-wide turnover within one and the same Member State.5 The
         notified operation therefore has an EU dimension.
4.       ASSESSMENT
4.1.     Product market definition
(7)      The Parties are active in (i) providing non-life insurance products, (ii) assistance
         services, (iii) the distribution of insurance products, and (iv) reinsurance.
             4.1.1.     Provision of non-life insurance products
(8)      The Commission has considered in previous cases that non-life insurance do not
         compete on the same product market as life insurance and re-insurance6. The
         Commission further considered several potential segments within non-life
         insurances, namely the following segments: (i) accident and sickness; (ii) motor
         vehicle; (iii) property; (iv) marine, aviation and transport; (v) liability; (vi) credit
         and surety ship; and (vii) travel7. However, ultimately, the Commission left the
         exact product market definition in relation to non-life insurance open.
4   Turnover calculated in accordance with Article 5 of the Merger Regulation.
5   While Roland achieves more than two-thirds of its aggregate Union-wide turnover within one Member
    State, Axa does not.
6   Cases COMP/M.5384, BNP Paribas/Fortis, COMP/M.5083, Groupama/OTP Garancia, COMP/M
    4284, Axa/Winterthur, COMP/M.4701, Generali/PPF Insurance Business,
7   Cases COMP/M.8617, Allianz / LV General Insurance Businesses, para 9; COMP/M.7233,
    Allianz/Going concern of Unipolasai Assicurazioni, decision of 10 June 2014, para. 11;
    COMP/M.6957 IF P&C / Topdanmark, para. 18 and COMP/M.6848, Aegon/Santander/Santander
    Vida/Santander Generales, para. 24.
                                                        2
 ---pagebreak--- (9)      The Parties consider that in light of their activities, a possible separate market
         could be defined for the underwriting of legal protection insurance. Legal
         protection insurances are insurances, designed to cover certain costs related to
         legal assistance of individuals, motor vehicle owners, business owners and
         employees in legal proceedings, regardless of whether a legal action is brought by
         or against the policyholder. The Parties submit that from a demand side
         perspective, legal protection insurance is not substitutable with other types of
         non-life insurance. The Parties also submit that the Commission could leave open
         the product market definition in relation to the underwriting of legal protection
         insurance.
(10)     In its preceding decisions, the Commission has tentatively considered a separate
         market for legal assistance insurances, eventually concluding however, that that
         potential sub-segmentation could be left open8.
(11)     The Parties also submit that a separate market for protection letters (Schutzbrief)
         may be considered. Protection letters consists of a declaration of the insurer to
         provide protection to the policyholder in case of an unexpected event that poses a
         danger to the rights or the legally protected interests of the policyholder. The
         Parties eventually submit that the Commission could leave open also this
         potential sub-segmentation.
(12)     Against this background, the Commission considers that, for the purpose of this
         case, the precise market definitions can be left open because no competition
         concerns would arise under any plausible product market definition.
              4.1.2.   Assistance services
(13)     Assistance services include organizing supports for customers. Assistance service
         policies are provided to both private customers and corporate customers such as,
         e.g., insurance companies, fleet owners or manufacturing companies, which
         include these services in the product offering for their customers.
(14)     In its previous decisions, the Commission has defined a separate market for the
         provision of assistance services. It noted that, in such a market, it is the assistance
         provider who organizes the assistance to the policyholder, while it is the insurer
         who covers the costs of such unexpected events.9 The Commission previously
         considered potentially separate sub-segment for road assistance10 and travel
         assistance.11
(15)     In the past, the Commission has tentatively considered that the market for
         assistance services could be further sub-divided into services provided to
         consumers purchasing contracts on an individual basis, and corporate customers
         who purchase roadside assistance services to cover their own fleet or who buy the
         services in bulk to resell such services to their own customers, often bundled with
8   See, for example: Case COMP/M.8257 – NN Group / Delta Lloyd, para 73; Case no COMP/M.7233 –
    Allianz / Going Concern of Unipolsai Assicurazioni, para 13
9   Cases COMP/M 6649 – Allianz / Insurance Portfolio and Brokerage Services of GAN Eurocourtage,
    para 17; M.3772 – Aviva / RAC, para. 13; IV/862 AXA/UAP, para 9; M.4701 – Generali / PPF
    Insurance Business, para 29.
10 Case COMP/M. 3772 – Aviva / RAC, para 13.
11 Cases COMP/M.4701 – Generali / PPF Insurance Business, para. 30; IV/M.862 – AXA / UAP, para 9.
                                                       3
 ---pagebreak---         another product. Furthermore, it considered a potential sub-segmentation of the
        market according to the type of customers (brand strength and reassurance
        oriented customers on the one hand and price oriented customers who see the
        service as commodity on the other hand), as was suggested during the market
        investigation. Eventually, in such instances the Commission decided to leave
        open the exact definition of the product market.12
(16)    The Parties submit that a distinction between assistance services and the markets
        for the underwriting of insurance policies is not appropriate. The Parties also
        submit that it would not be appropriate to distinguish between assistance services
        based on whether the underlying agreement has been entered into with a private
        individual or a corporate customer.
(17)    Against this background, for the purpose of this case, the Commission considers
        that the precise market definitions can be left open because no competition
        concerns would arise under any plausible product market definition.
             4.1.3.    Reinsurance
(18)    Reinsurance consists of providing insurance cover to another party, the insurer,
        for part or all of the liabilities assumed by the latter party under a policy or
        policies of insurance which it has issued. It is a means of risk management, to
        transfer risk from the insurer to the reinsurer.
(19)    In its prior decisional practice, the Commission has tentatively considered but
        ultimately left open whether, within the reinsurance market, a further distinction
        between life and non-life segments should be considered, and whether within the
        non-life segment, an additional segmentation according to the class of risk
        covered should be considered.13
(20)    The Parties submit that the market comprises all reinsurance, given the large
        degree of supply-side substitutability.
(21)    Against this background, the Commission considers that, for the purpose of this
        case, the precise market definitions can be left open because no competition
        concerns arise under any plausible product market definition.
4.2.    Geographic market definition
             4.2.1.    Provision of non-life insurance products
(22)    In previous cases, the Commission considered markets for insurance products to
        be national in scope.14 However, the Commission has ultimately left the exact
        scope of the geographic market open. The Parties agree to this approach.
12  Case COMP/M. 3772 – Aviva / RAC, para 17.
13  Case COMP/M.8257, NN Group /Delta Lloyd, para. 104.
14 Cases COMP/M.7233, Allianz / Going concern of Unipolasai Assicurazioni, decision of 10 June 2014,
    para. 20; COMP/M.6957 IF P&C / Topdanmark, para. 30, COMP/M.6521, Talanx International /
    Meiji Yasuda Life Insurance / Warta, para. 56.
                                                   4
 ---pagebreak--- (23)      For the purpose of this case the precise geographic market definition can be left
          open because no competition concerns arise under any plausible geographic
          market definition.
              4.2.2.    Assistance services
(24)      The Parties submit that the geographic market for assistances services is national
          or wider (regional) in scope.
(25)      In its decisional practice, the Commission has defined the relevant geographic
          market for travel assistance services and roadside assistance services to be
          national in scope.15
(26)      Against this background, the Commission considers that, for the purpose of this
          case the precise geographic market definition can be left open because no
          competition concerns arise under any plausible geographic market definition.
              4.2.3.    Reinsurance
(27)      In previous cases, the Commission considered markets for reinsurance to be
          global in scope due to the need to pool risks on a worldwide basis.16 However, the
          Commission has ultimately left the exact scope of the geographic market open.
          The Parties agree to this approach.
(28)      Against this background, the Commission considers that, for the purpose of this
          case the precise geographic market definition can be left open because no
          competition concerns arise under any plausible geographic market definition.
4.3.      Competitive assessment
(29)      The Parties and Gothaer's market shares are represented in the table below.
Table 1: market shares of the Parties and Gothaer
                                                             AXA         Roland     Combined Gothaer
                Legal protection insurance (Italy)            [0-5]%       [5-10]%     [5-10]% [0-5]%
   Non-life
  insurance     Legal protection (Germany)                          na           na
                Protection letters (Germany)                  [0-5]%        [0-5]%      [0-5]% [0-5]%
                Assistance services (Germany)                 [0-5]%        [0-5]%      [0-5]% [0-5]%
                       Roadside assistance (Germany)          [0-5]%        [0-5]%     [5-10]% [0-5]%
                       Other assistance (Germany)             [0-5]%        [0-5]%      [0-5]% [0-5]%
 Assistance            Assistance services, Corporate
   services            customers (Germany)                   [5-10]%       [5-10]%   [10-20 ]%  [0-5]%
                       Assistance services, Corporate
                       customers (excl. Intra-group)
                       (Germany)                             [5-10]%      [10-20]%   [10-20 ]%  [0-5]%
 Reinsurance (global)                                         [0-5]%        [0-5]%      [0-5]%  [0-5]%
Source: Data provided by the Parties
15   See: Case COMP/M.4701 – Generali / PPF Insurance Business, para. 30.
16   See cases M.5925 – MetLife / Alico / Delam, M.5083 – Groupama / OTP Garancia, M.4059 – Swiss
     Re / GE Insurance Solutions and M.6053 - CVC / Apollo /Brit Insurance
                                                      5
 ---pagebreak--- (30) Based on the Parties' estimates, the combined market share are well below 20%
     under all plausible market definitions.
(31) Since the Parties' combined market shares do not exceed 20% on any horizontally
     or vertically related markets, the Transaction does not give rise to any affected
     markets and will not raise competition concerns.
(32) Even taking the activities of Gothaer into account, the assessment does not
     change due to the still very limited overall market of all parties involved.
(33) For these reasons, the Transaction does not raise concerns as to its compatibility
     with the internal market.
5.   CONCLUSION
(34) 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
                                              6