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European Commission

Press release

Brussels, 12 June 2014

State aid: Commission approves amendments to restructuring plan of Belgian insurer Ethias

The European Commission has found proposed amendments to the restructuring plan of the Belgian insurance company Ethias to be in line with EU state aid rules. In particular, the Commission has agreed to the proposed prolongation by three years of the rundown of Ethias' retail life insurance portfolio as well as the measures aimed at ensuring the profitability and low risk of its other activities. The Commission considers that these amendments do not endanger the restoration of Ethias' long term viability nor do they increase the risk of competition distortions in the Single Market.

Commission Vice President in charge of competition policy Joaquín Almunia said: "The amendments to Ethias' restructuring plan proposed by the Belgian authorities aim to consolidate the viability of Ethias, taking into account the current market conditions, without increasing the risk of distorting competition in the Single Market."

Ethias has successfully implemented a large part of its restructuring plan and its non-life insurance activities generate significant profits. However, in the prevailing low interest rate environment, it could not find a buyer for its retail life contracts, under which policyholders receive a guaranteed interest rate which is higher than current long term interest rates. Ethias therefore started to run down these contracts, which allowed it to reduce the size of the portfolio. However, the majority of the contracts are still outstanding, in particular those for which customers enjoy a guaranteed rate not limited to eight years. This has delayed Ethias in becoming profitable and impeded it from remunerating the public shareholders at the level it committed to in 2010.

Belgium has therefore proposed to amend the restructuring plan so that Ethias continues to run down its retail life reserves for an additional three years but is no longer obliged to fully divest or run down this portfolio unless an increase in market interest rates makes a sale of the contracts possible. Moreover, the measures aimed at consolidating Ethias' newly restored strong profitability and limiting the risk of its financial portfolio would also be continued during that time. These measures include targets for operational profitability and a prudent financial investment policy. The Commission considers that this will likely restore Ethias' financial position and allow it to start remunerating its public shareholders. The proposed new commitments therefore adequately replace the commitments, which were part of the original restructuring plan but were not implemented.

Furthermore, the amendments suggested by the Belgian authorities also include specific commitments on corporate governance which aim at establishing more independence from Ethias of the public shareholders' investment vehicle (Vitrufin). This should ensure for instance that the public shareholders will be able to manage their shareholding in Ethias more independently from Ethias' view.


Ethias SA and its subsidiaries (hereinafter "Ethias") are active almost exclusively on the Belgian insurance market, offering products to individuals as well as corporate and public sector clients. Ethias was the third biggest insurer in Belgium, with a balance sheet size of € 28.6 billion as of 31 December 2008. Due to its exposure to liquidity and financial risk, stemming from its retail life insurance policies and its significant exposure to Dexia shares, when the financial crisis erupted in 2008, Ethias was faced with severe solvency and liquidity problems.

In 2009, the Belgian Federal State together with the Flemish and Walloon regions granted a recapitalisation of € 1.5 billion to Ethias via the investment vehicle Vitrufin. In 2010, the Commission authorised Ethias' restructuring plan and associated commitments submitted by the Belgian authorities (see IP/10/592). The complete removal, either through a sale or an internal run down, of Ethias' retail life portfolio (so called "First" products) was one of the key measures of the restructuring plan to restore the company's viability.

The non-confidential versions of these decisions will be made available under the case number SA.30962 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :

Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )

Yizhou Ren (+32 2 2994 889)

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