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Athora Holding Ltd., an insurance affiliate of Apollo Global Management Inc., and AXA SA have terminated a deal to transfer life insurance policies in Germany almost two years after announcing it.

The deal was meant to shift €19 billion ($20.3 billion) of AXA’s liabilities — mostly related to annuity products — to Athora, according to a . The termination agreement is “consistent with the contractual terms of the sale agreement,” according to Athora’s statement on Thursday.

Both firms agreed to terminate the deal following “significant changes in financial market conditions,” Athora said. Interest rates have risen sharply over the past two years in response to soaring inflation, making annuities a riskier prospect.

Athora said it remains committed to further growth in German savings and retirement and has about €2.2 billion [$2.3 billion] of undrawn equity capital for back-book deals.

AXA Chief Financial Officer Alban de Mailly Nesle said in a separate statement the French firm “does not expect any impact” on its financial targets as a result.

The market for back books, or portfolios of old insurance policies, has been active in recent years in Europe as insurers seek to free up capital. These legacy assets are being snapped up by consolidators such as Athora, which are backed by private equity.

However, the market was thrown into turmoil after Cinven-backed Italian life insurance firm Eurovita Holding SpA was put into administration, forcing a pool of banks and insurers to hash out a rescue package.

A similar deal between Swiss insurer Zurich Å˽ðÁ«´«Ã½Ó³»­ Group AG and Viridium, a Cinven-backed vehicle and competitor of Athora, fell through in January.

Photograph: View of AXA headquarters in Paris on March 6, 2018, in Paris, France. Photo credit: Christophe Morin / Bloomberg

Topics AXA XL Germany