Funeral insurance and crematoria cooperative Dela is taking over sector peer Yarden, the two companies announced on Monday.

Yarden has been forced to dig deep into its reserves after running into trouble with a portfolio of old policies and had been looking for a partner.

The portfolio is made up of ‘natura’ policies, which guarantee to provide a complete funeral, including coffin, car and cake, rather than a fixed amount of money.

Yarden said the policies no longer covered the cost and had tried to change the terms and conditions, but policyholders went to court and won. Yarden then set aside €84m to cover the cost, although the true cost may be far higher.

The Dela deal gives Yarden a capital injection and will dent Dela’s solvency, Dela director Edzo Doeve said. However, the solvency ratio will improve again thanks to the synergy effects, and both Dela and Yarden members will benefit, Doeve said.

Dela is Dutch market leader, with four million members, and organises some 44,500 funerals a year.