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ARAG Rechtsschutz to adopt a branch structure

Notification procedure for six European branch organizations
Redistribution of responsibilities on the Management Board
Imminent transformation of ARAG Rechtsschutz into ARAG SE

The Supervisory Board of ARAG Allgemeine Rechtsschutz-Versicherungs-AG has approved plans by the Management Board to register branch organizations in Austria, Belgium, Italy, the Netherlands, Slovenia, and Spain within the framework of a notification procedure. The plans call for merging the ARAG subsidiaries in these countries onto ARAG Rechtsschutz (future ARAG SE) as branch organizations under the umbrella of ARAG SE in a step-by-step process in 2012. The planned mergers will be realized over the course of the entire coming year. The Management Board also envisages implementing a new management structure, which would take effect on 1 January 2012. The transformation of ARAG Rechtsschutz into ARAG SE will be completed within the next several weeks. All of the proposed changes are subject to approval by the relevant regulatory authorities.

“A phase of intense implementation work has now begun for the ARAG Group. We are adapting our national and international corporate structure to meet the challenges of the future,” explains Dr. Paul-Otto Faßbender, CEO and majority shareholder of ARAG. The objective is to create a reorganized European corporation with a management and leadership structure that is much more closely in line with corporate reality. “It makes little sense in today’s world to manage ARAG as if it were a niche provider operating only in Germany. The organization has changed too much for that,” notes Dr. Paul-Otto Faßbender. “We regard the diversity of our Group as an opportunity and are now acting accordingly.” The new structure is also expected to facilitate management of the organization in the more strictly regulated European insurance markets.

Management structures will also be adapted as the planned changes progress. This process will include a redistribution of responsibilities on the Group Management Board.

“The effectively functioning executive management team of ARAG Rechtsschutz will remain in place within the new constellation of functions and responsibilities,” emphasizes Dr. Paul-Otto Faßbender. All sales-related functions currently assigned to the double department of “Group International/ Sales National” will be reassigned to a newly established “Group Sales” department headed by Dr. Kathan. Duties and responsibilities of the former international department will then be transferred to the existing line functions of the other executive departments.

“We will be managing the business operations of the ARAG Group with much greater attention to functional efficiency and task distribution within the executive management team. That is a logical consequence of the success we have achieved in this business field. Premium income has risen by 90% in this area since 2001,” Dr. Paul-Otto Faßbender points out. In view of the Group’s growth targets for both domestic and foreign business, it makes perfect sense to establish a strong sales department that is equipped to manage both national and international operations.

The process of transforming ARAG Allgemeine Rechtsschutz-Versicherungs-AG into ARAG SE has been completed, for the most part. The necessary co-determination agreement with European employee representatives has already been signed. Mandatory registration at the Registration Court will take place at a later date.