Specialist run-off manager, Axa Liabilities Managers has bought the run-off portfolio of Hamburg-based reinsurance company Schwarzmeer Und Ostsee Versicherungs-AG - also known as Sovag.

Sovag ceased underwriting all lines of business in December 2016 with a total book value of EUR85m ($98.3m) of gross outstanding reserves. It consists of inward reinsurance business and direct business.

Sovag is known to have previously been in advanced talks with rival legacy acquirer Quest Group. The now-defunct insurer is headed up by Arndt Gossmann, the former boss of run-off firm Darag.

Sylvain Villeroy de Galhau, CEO of Axa LM, said: “We are very satisfied that we were able to reach a final agreement with Sovag. Thanks to our experience in the German market and our ability to execute deals, we are confident that we can bring this transaction to a close and start to proactively manage the run-off that Sovag has entrusted us with.”

Gossmann, now CEO and chairman of Sovag, added: “The transaction with Axa LM represents a major landmark in the successful restructuring of Sovag.

“ With Axa LM, we have found a first-class partner to take care of the Sovag non-life portfolio. It has been an impressive journey that we hope to complete by the end of this year.”