Insurance Company ERGO (MUNICH Re's primary insurance unit) intends to triple the share of premium growth from Eastern Europe, where policy sales are coming off a low base, according to WSJ.
"Currently, 10% of our premium growth comes from Eastern Europe", Elisabeth STADLER, Head of ERGO's Austrian unit, stated. "My aim is to increase growth in such a way that in five years 30% comes from the region".
Following the acquisition of a majority stake in BANK Austria Creditanstalt Versicherung, ERGO plans to use its Austrian unit as a platform to expand in Central and Eastern Europe, where it is active in six countries. ERGO Austria International AG, based in Vienna, aims to increase premium income by 50 percent, to EUR 1.5 billion by 2015, from last year, STADLER said.
Insurance premiums in Western Europe in 2008 as percentage of gross domestic product were three times as high as in Central and Eastern Europe, according to a SWISS Re study published in June. Premiums per capita were about USD 299 in the East, less than a tenth of levels in the West.
"Eastern Europe holds so much potential that the focus is on winning new customers", said STADLER. ERGO makes about 70% of its sales in the region through banks.
ERGO, Germany's second-biggest primary insurer after Munich-based ALLIANZ SE, has repeatedly said it planed to increase the revenue contribution of international operations. MUNICH Re scrapped recently a target to boost profit at ERGO to EUR 900 million by 2012, after nine-month profit at the unit slumped 75 percent to EUR 95 million.
