NU Online News Service, June 27, 10:25 a.m. — London
The German insurer Allianz AG plans to significantly expand its activities in Russia with the purchase of a 45% stake in ROSNO, the third largest Russian insurance company in terms of gross premiums written, with a total market share of approximately 6%.
With this step, Allianz will be the first international insurer to take a major stake in a leading Russian insurance company. In the future, Allianz will have an option to increase its stake in ROSNO, which does property-casualty business and roughly the same amount of life and health insurance markets, according to a representative of the Munich-based Allianz.
The parties involved in the deal have agreed not to disclose the financial details of the transaction, which is subject to approval by the relevant regulatory authorities in Russia, Allianz says.
The company expects the deal to be closed in September.
The Moscow-based ROSNO’s clients include large international corporations, Russian companies and individuals. The company had gross premiums of $311 million in 2000 and the number of clients grew by nearly 30% during that year, according to Allianz.
Allianz is acquiring the shares in ROSNO from the Moscow-headquartered financial and industrial holding company Sistema, and from other shareholders. (Allianz says in the release announcing the deal that Sistema’s major shareholder is Vladimir Evtuchenkov, the comopany’s chairman.)
Allianz says the investment represents a significant step for its expansion in the Russian market, where it has operated since 1991 with Ost-West-Allianz, a company that specializes on large industrial clients. OWAZ will remain independent and will continue to focus on its niche market, the company says.
“The stake in ROSNO will allow Allianz to participate more significantly in the local corporate clients market and the market for personal lines?especially the growing health insurance and private provision business,” Allianz says in a statement.
“The Russian insurance market plays an important and driving role in the CIS and has enormous growth potential,” Michael Diekmann, the Allianz management board member responsible for, among other things, Central and Eastern Europe as well as Asia, says in a company statement. “By acting now, we can secure our first-mover advantage in this market.”
“With this transaction, Sistema brings another significant foreign investor to the Russian market, which is positive for our economy,” says Evgenij Novitsky, president of Sistema. “We look forward to working with Allianz to contribute to the development of the insurance sector in Russia.”
Allianz says the Russian market has enormous growth potential. “For example, less than 1% of the population has a life insurance contract and less than 5% owns private health insurance,” the company says. “While the average annual amount spent on insurance products per person in, for example, Poland and Hungary lies at $107 and $113, respectively, this sum in Russia only amounts to approximately $30.”