VIG stays out of RUSSIA as acquisition targets rare

3 June 2014 —
Vienna Insurance Group AG (VIG), Eastern Europe's biggest insurer, said it won't expand into Russia even as the number of acquisition targets in other parts of the region shrink. VIG, which is based in the Austrian capital and operates in 25 countries, ended its Russian involvement in 2012, almost two years before the Ukrainian crisis sparked limited sanctions against Russia, by selling minority stakes in three insurers.

"We're not able to run our business model in Russia," VIG Chief Executive Officer Peter Hagen said in an interview in Vienna. "We don't understand the structure, the country is too big and we are not equipped for this."

VIG is moving from a period of growth driven by more than 50 acquisitions since 2002 to tapping new business via existing operations. With Eastern European insurance density still at a fraction of Western Europe's business, it remains focused on the region even as some markets are battling recessions.

While not ruling out smaller purchases in the next several years, "more and more markets are distributed," Hagen said. Even if there might be some activity in Poland, Hungary or the Baltic states, "most of the big stuff is gone," he said.

Since the Russian pullout, VIG has bought competitors in Macedonia, Hungary, Poland and Moldova, giving it an 18 percent market share in its core markets.

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VIG stays out of RUSSIA as acquisition targets rare
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