ERSTE Bank gives up insurance
ERSTE Bank sells insurance operations for EUR 1,445 million and signs
15 year distribution agreement with Vienna Insurance Group.
Subject to competition authorities and the local insurance regulators'
approval, ERSTE Bank will sell its insurance investments in Austria and
in the countries of Central and Eastern Europe to Vienna Insurance Group
(VIG). The agreement was signed yesterday by the two CEOs Andreas TREICHL
and Gunter GEYER after the resolutions were passed by the respective
supervisory bodies.
In addition to the sale of the insurance subsidiaries, a distribution
co-operation agreement was signed by the two groups. This agreement has
a term of 15 years and will form the basis for closer co-operation between
ERSTE Bank and VIG. In the agreement, the two partners commit to sell
each other's products through their respective sales channels, and to
give them preferential treatment. This provides VIG with access to over
2,900 branches and to the over 16 million ERSTE Bank customers in the
region. In return, ERSTE Bank gains access to around 10 million VIG customers,
in those countries in which both partners are currently active.
VIG has been a partner of ERSTE Bank Group in the P&C insurance business
for many years. In this context, the non-life business of ERSTE Bank's
Czech insurance subsidiary was sold to VIG in 2004. The transfer of the
life insurance business therefore is as a logical next step and will
allow ERSTE Bank to concentrate on its core business, namely, selling
financial services.
"With this transaction ERSTE Bank and VIG prove that successful long-term co-operation
between independent partners does not need significant cross-shareholdings. In
addition we secure VIG's strong CEE customer base for us, creating additional
cross-selling potential for our products", states Andreas Treichl, CEO of ERSTE
Bank commenting on the transaction.
In Romania, VIG will - subject to approval of the local management and
supervisory boards as well as the local competition authorities and the
local insurance regulators - acquire majority stakes in the Romanian
life insurance and the non-life insurance companies BCR Asigurari de
Viata and BCR Asigurari from Banca Comercial Romana (BCR). As in the
other countries, a share of 5% in the life insurance company BCR Asigurari
de Viata will remain with BCR. The remaining shares are held in free
float. Total gross premiums written from life insurance were EUR 24.8
million in 2007 and premium income from non-life insurance was EUR 155.1
million.
Overview of insurance operations:
ERSTE Bank in Austria: Sparkassen Versicherungs AG (s Versicherung)
As part of this transaction, s Versicherung, the second largest Austrian
life insurer, in which ERSTE Bank presently holds a stake of around 90%,
will be sold to VIG subject to approval of the local management and supervisory
boards as well as the local competition authorities and the local insurance
regulators. ERSTE Bank will retain a 5% stake in s Versicherung. Total
gross premiums written in Austria amounted to EUR 808.6 million in 2007.
Ceska sporitelna: Pojisovna Ceske sporitelny
The fourth-largest insurance company in the Czech Republic, Pojistovna
Ceske sporitelny, a.s. (PCS), is owned 55.25% by Ceska sporitelna and
44.75% by s Versicherung. It will be sold to VIG within the scope of
this transaction following approval of the local management and supervisory
boards as well as the local competition authorities and the local insurance
regulators. Ceska sporitelna will retain a 5% stake. The annual total
gross premiums written by PCS were EUR 232.9 million in 2007
Slovenska sporitelna: Poistovna Slovenskej sporitelne, a.s.
Poistovna Slovenskej sporitelne, a.s is the ninth-largest insurance company
in Slovakia and owned in equal parts by ERSTE Bank, Slovenska sporitelna
and s Versicherung. Subject to approval of the local management and supervisory
boards as well as the local competition authorities and the local insurance
regulators, 95% of Poistovna Slovenskej sporitelne will be sold to VIG.
A share of 5% will be retained by Slovenska sporitelna. Total gross premiums
written by the company amounted to EUR 24.8 million in 2007.
ERSTE Bank Croatia: ERSTE Sparkassen osiguranje d.d. za zivotno osiguranje
With total gross premiums written of EUR 8.9 million, the Croatian ERSTE
Sparkassen osiguranje d.d. za zivotno osiguranje is number twelve in
the Croatian market for life insurance. ERSTE Osiguranje is owned 26%
by ERSTE Bank Croatia and 74% by s Versicherung. Subject to approval
of the local management and supervisory boards as well as the local competition
authorities and the local insurance regulators, 95% of the company will
be sold to VIG. A share of 5% will be retained by ERSTE Bank Croatia.
ERSTE Bank Hungary: ERSTE Sparkassen Biztosito Zrt.
ERSTE Sparkassen Biztosito Zrt. is owned 100% by s Versicherung and had
total gross premiums written of EUR 36.0 million in 2007. Subject to
approval of the local management and supervisory boards as well as the
local competition authorities and the local insurance regulators, 95%
of the company will be sold to VIG. A share of 5% will be retained by
ERSTE Bank Hungary.
Serbia/Ukraine
In Serbia and the Ukraine, ERSTE Bank does not have insurance operations
that are being sold within the scope of the transaction. Nonetheless,
in these two countries, a 15-year distribution agreement has been signed
by the local banks and the corresponding insurance companies of VIG.
Author: Mihaela CIRCU
on 27.03.2008
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