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Foreign investors interested in expanding on Russian
insurance market
The completion of negotiations about Russia's WTO entry is prompting
foreign insurers, especially Europeans, to enter the Russian insurance market.
As of December 31, 2007, there were 80 companies with foreign capital in
Russia, accounting for 25% of the market premiums. A year before, there
were only 70 with the aggregate share of 17%, Yana MIROSHICHENKO, Director
of the Department for Strategic Analysis of Financial Markets at the audit
company MARILLION, said on April 22. Earlier, MIROSHICHENKO was deputy head
of the department for accounting and economic analysis of the Federal Service
for Insurance Supervision (FSIS).
According to FSIS, as of January 1, 2008, total authorized capital of Russian
insurers came to EUR 4.2 billion, 2.9% up compared with the previous year.
Foreign capital rose more than two times, accounting for 9.9% of the total
authorized capital, or EUR 423.1 million. As of January 1, 2007, aggregate
authorized capital of Russian insurance companies amounted to EUR 4.1 billion,
foreign capital - to EUR 176.3 million (4.3% of total authorized capital).
MIROSHICHENKO described three possible scenarios of the role foreign companies
may play in the Russian insurance market in the next three years.
According to the first scenario, the 25% limit on foreign capital may be
exhausted as early as at the end of 2009 if foreign investors continue to
show interest in the Russian insurance industry. If the scenario plays out,
the share of foreign capital in the market will reach 19.5% as of January
1, 2009 and 27.5% as of January 1, 2010.
The second scenario will be realized if FSIS gradually withdraws licenses
of the companies involved in pseudo-insurance operations and the pace of
entry of foreigners is moderate. As a result, the share of foreign capital
will be 16.7% as of January 1, 2009, 23.1% as of January 1, 2010 and 25.9%
at the end of the year 2010. "This means that the Russian market becomes
closed for foreign investors by year- end 2010", noted MIROSHICHENKO
who holds this scenario as the most possible one.
The third scenario involves an insignificant decrease in the number of insurers
with Russian capital and low interest of foreigners in the Russian market.
If the scenario plays out, the share of foreign capital will be 21.9% at
the beginning of 2009 and 24.1% as of December 31, 2010.
In addition, MIROSHICHENKO expressed her opinion about the further increase
in authorized capitals of Russian insurers. "Their capitals are likely
to grow mainly thanks to foreign investors. Internal capitalization reserves
of the industry aren't large", she said. She also added that
the insurance industry can't compete in returns from capital investments
with other financial segments.
MARILLION's experts pointed out that non-residents prefer to acquire
insurers that already have licenses for writing business in Russia, rather
than go greenfield. In 2007, foreign investors established 8 insurance companies
with an aggregate capital of EUR 14.6 million. In the same year they acquired
15 existing insurers with a total capital of about EUR 211.5 million.
By RP Newsline, 25.04.2008
KD Life enters Croatian life insurance market
After the Croatian Financial Services Supervisory Agency (HANFA) clears
its founding, KD Zivotno Osiguranje d.d., a subsidiary of Slovenia-based
insurer KD Life, will become the third Slovenian insurance company at the
Croatian life insurance market.
HANFA has also granted approval to KD Life and to Holding to acquire more
than 50% and more than 33% in the initial capital of the KD Zivotno osiguranje
d.d. respectively.
The first CEO of the new company will be Neven TISMA, former board member
in ALLIANZ Zagreb.
KD Life is being founded by Ljubljana-based KD Zivljenje, member of KD Group,
following the trail of TRIGLAV and VELEBIT, according to Croatia Today Agency.
KD Zivljenje CEO Matija SENK says their arrival to the Croatian market was
expected since two members of the KD Group are already present in the country.
Last year KD Zivljenje's premium in Slovenia reached EUR 57.6 million, with
the market share of 11.8 percent. It has also branches in Romania, Slovakia,
the Czech Republic, Bulgaria and the Ukraine.
by oleg.doronceanu@mxp.ro 22.04.2007
GENERALI, to launch reinsurance business in Bulgaria
GENERALI, one of the leading European insurance group will launch a reinsurance
business in Bulgaria that will cover the Central and Eastern Europe, according
to news portal DNEVNIK, that stated Daniela KONOVA, Chairperson of the managing
board of GENERALI Bulgaria Holding.
Work is in progress on the documents necessary to secure a reinsurance license
for the new company, said the company official.
Bulgaria's conducive tax policy gave the country the edge when the center of
the GENERALI regional reinsurance business was being selected, said KONOVA.
The licensing procedure could last up to four months. 'We hope to get there
in three,' added official.
The selection of Bulgaria to host the GENERALI regional center means an additional
turnover of close to EUR 1 billion, Prime Minister Sergei STANISHEV said in
connection with the news on the Bulgarian National Television.
Through GENERALI Bulgaria Holding, GENERALI PPF Holding, which has operations
in 12 Central and East European countries, owns 99% in GENERALI Insurance, 99%
in GENERALI Life Insurance and 77.5% in GENERALI Zakrila Health Insurance.
by oleg.doronceanu@mxp.ro, 29.04.2008
30% growth for the insurance market of Ukraine in
2008
Positive dynamics of the insurance market of Ukraine, reached in 2007, will
be kept also in 2008, according to League of the Insurance Organizations of
Ukraine forecasts (LSOU).
According to the State Commission for Regulation of Financial Services Markets
of Ukraine, in 2007 local insurers have collected more than EUR 2.2 billion,
30,2 % up compared with the previous year.
Life insurance segment was the most dynamic, with total insurance payments of
EUR 99.7 million (growth by 73,9 %).
"It is indicative, that by January, 1st, 2008 in Ukraine under contracts
of life insurance were insured more than 2.84 million person, and almost 660
thousand were insured in 2007. It testifies the growth of popularity of the life
insurance which is dominating all over the world. LSOU constantly studies world
experience of development of insurance and in the European practice almost 80
% of pensions are provided by life insurance companies", Alexander FILONIYK,
President of the LSOU, has declared.
Besides that, the MTPL premium have increased for 67,9%, on insurance of medical
charges - 74,3 %, credit risks - 58,6 %, thus, the amount of net premiums (without
taking into account reinsurance) has made almost EUR 1.4 billion (growth on
32,1 %). Insurance payments have considerably increased also. In 2007, they
have exceeded EUR 534.2 million, increasing by 62, 1 %, as compared with 2006,
thus, the level of total insurance claims to the collected premiums has grown
up to 23,4 % (18,8 % in 2006 and14,7 % in 2005).
For 2007 there have been concluded almost 600 million insurance contracts, from
which 12, 3 million - on the retail segment, that generated EUR 657.6
million. "This is a very important parameter for the insurance market,
it shows the trust of the population in the insurance services ", added
FILONIYK.
by mihaela.circu@mxp.ro 28.04.2008
TRIGLAV has confirmed its participation in NLB privatization
Zavarovalnica TRIGLAV, Slovenia's largest insurer, endorsed the company's
participation in the share capital increase of NLB, Slovenia's top bank,
according to SLOVENE Press Agency.
TRIGLAV, already a minority shareholder in NLB, will contribute EUR 55.3
million to maintain its stake in the bank.
The shareholders of NLB have decided to increase the bank's capital
in January 2008 by issuing 898,204 thousand of new shares at a price of
EUR 334 per share. The total value of the new shares amounts to EUR 300
million. The subscription of new shares by existing shareholders will take
place
between 17 and 30 April.
The Slovenian state decided to invest EUR 106.2 million in the share capital
increase. Apart from TRIGLAV's stake, the government will provide EUR 34.5
million from the budget, while the state-owned DSU management and consultancy
enterprise will chip in with the remaining EUR 16.3 million.
The largest owner of the NLB is the Slovenian government, which holds a
45.47% stake (together with the state-run KAD and SOD funds). Belgian banking
and insurance group KBC, which said it would not take part in the capitalization,
holds 34%, but its stake is expected to shrink to 27%.
The existing shareholders will be able to buy the new shares until
April 30th at EUR 334 per share, 2.48 - times the book value as at March
31st.
If the existing shareholders fail to grab up the entire issue by April
30th at 1 PM, the shares will be offered to the public between 9 May and
29 May until 1 PM.
A potential third round of bidding, which would take place between 10 and
16 June by 1 PM, is meant for institutional investors. The EUR 300 million
issue will increase the bank's share capital by 11.2%.
by andreea.ionete@mxp.ro, 24.04.2004
SAVA Re intends to IPO in end-April
Slovenian reinsurer SAVA Re and its majority owner, the state-run Restitution
Fund (SOD), intend to publish an initial public offering (IPO) for SAVA
Re in late April.
Reinsurer's shareholders endorsed a EUR16.405 million capital increase
from EUR32.81 million to EUR49.215 million in the next five years as they
met at an annual general meeting in Ljubljana. SAVA Re was allowed to issue
up to 3.93 million new shares.
The IPO will include Sava's existing shares as well as those offered by
the reinsurer as part of its share capital increase, Slovene Press Agency
reports.
SOD has no intention to take part in the share capital increase and plans
to keep at least 25% plus one stake in the company. Chairman of SAVA Re,
Dusan CEC was upbeat regarding the capital increase, also because the reinsurer
was successfully acquiring stakes in insurance companies in the Western
Balkans.
The company is therefore in "a good place to be sold to the public",
he said. SOD director Marko POGACNIK added that the IPO represented a positive
development for the reinsurer and the fund.
The bid is expected to run from 26 April to 6 May for private investors
and companies and between 26 April and 9 May for existing shareholders.
State-run Restitution Fund SOD controls 99.9% of SAVA Re's shares.
In 2007, reinsurer have wrote EUR118.540 million in premiums and paid EUR70.359
million in claims.
by vlad.panciu@mxp.ro, 25.04.2008
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