Reinsurer Munich Re and German bank HVB Group expect a new cooperation agreement to save them €315m (£194.9m), divided equally between the two firms, by 2006.
The companies said their partnership would focus on cross selling between HVB's HypoVereinsbank, the second largest German bank, and Munich Re's primary insurance arm Ergo, the second largest German primary insurer.
Synergies from the partnership are expected to total €175m (£108.3m) next year and €235m (£145.4m) in 2004.
Munich Re took a 25.7% stake in HVB earlier this year as part of a complex reshuffle of shareholdings triggered by Allianz's takeover of Dresdner Bank, which created one of the world's leading bancassurance groups.
The companies said that together, ERGO and HypoVereinsbank serviced 30 million clients across Europe, through approximately 24,000 agents and 2,400 branches.
Several sectors of business are marked for expansion through the agreement. These include insurance and banking, company pensions, real estate management, alternative risk transfer, financing and insurance of large-scale projects.
Both groups said they expected considerably higher turnover and earnings to result from their joint development of the European market for private provision, as well as from cooperation on reinsurance and banking, and collaboration in other fields.
In a statement, the companies said: "This strategic partnership is new in its three-dimensional form of 'banking, insurance and reinsurance' and will create substantial added value. It enables us to extend our position as a leading European financial alliance."
