Munich Re: Prostitutes Attended Rewards Party

 

 

The headquarters of Munich Re in Munich. Photographer: Guido Krzikowski/Bloomberg

A Munich Re unit hosted about 20 prostitutes at a Budapest party to reward the insurer’s high- performing agents, a spokesman said.

The incident in the summer of 2007 was a “clear violation” of company policy, said Alexander Becker, a spokesman for the Ergo Versicherungsgruppe subsidiary, in a telephone interview yesterday. Senior management involved in organizing the event are no longer employed at Ergo, he said.

Ergo hosted the party for about 100 guests at the historic Gellert spa, Handelsblatt reported in a preview of an article to be published today. Women wore color-coded armbands, the newspaper said, citing unidentified guests, with red for hostesses, yellow for those available for sexual favors and white for women reserved for executives and top agents. After each trip to beds set up near the thermal baths, a woman would receive a stamp on her forearm, the paper reported.

Ergo and other insurers typically sell insurance products such as life, car and health coverage through so-called tied agents, independent brokers or other channels to customers. Such incentive trips for especially successful salespeople “definitely don’t usually proceed the way it’s described” in the German newspaper’s report, Becker said. He declined to comment on the details of the party.

Munich Re, the world’s biggest reinsurer, fully owns Dusseldorf-based Ergo, Germany’s second-biggest primary insurer after Allianz SE. The Budapest party was hosted by an Ergo unit, then known as Hamburg-Mannheimer Versicherungs-AG.

People responsible for the trip, including a Hamburg- Mannheimer board member, left the company before the case was known, spokeswoman Alexandra Klemme said in an e-mail. The unit was rebranded Ergo under a strategy announced in 2009.