GENERALI PPF acquiers ARDAF and RAI
GENERALI PPF Holding has signed an agreement with PPF Investments,
international private equity group, to acquire control of two Romanian
insurance companies ARDAF and RAI. In particular, the acquisition concerns
the 72.7% of ARDAF and the 99.9% of RAI. Transaction is still subject
to the approvals of all relevant regulatory authorities. The acquisition
will enable the Holding to expand operations in Romania which is one
of the Holding's strategic markets in CEE.
GENERALI Group CEO and Chairman of the Board of GENERALI
PPF Holding, Sergio BALBINOT said: "Romania is a strategic market for
us, and one that in recent years has registered the highest EU growth figures.
Over the next few years, the country's excellent economic fundamentals
will support continued double-digit growth on the insurance market. This
transaction will double our share in Romania, raising it to 11.7%. The
Group's distribution capabilities are also on the up, through a network
of 8,000 agents distributed across the country". BALBINOT added: "Our
aim is to continue expanding in high-potential markets, which we consider
the drivers of our group's future growth, through targeted acquisitions".
ARDAF operates both in life and non life insurance, with a
total volume of gross premiums in 2007 equal to EUR 48.4 million, mostly
from non life insurance policies and motor third-party liability policies
in particular. The company focuses primarily on retail business, and avails
of a distribution network of 35 branches, 222 agencies and over 5,100 agents.
RAI is a market leader in travel and medical insurance, with gross premiums
in 2007 equal to EUR 7.8 million. GENERALI PPF already operates in Romania
through GENERALI Asigurari, which operates both in life and non life insurance,
and through GENERALI Fond de Pensii, the third leading Romanian pension
fund.
Whilst Romania is the second largest economy of the ten eastern
European countries that joined EU between May 2004 and January 2007, its
insurance market is comparatively small, ranking sixth amongst CEE countries
with a total GWP of 1.6 billion euros in 2006. Romania has the lowest insurance
penetration in the region (premium to GDP ratio 1.7% in 2006) and the third
lowest insurance density across the CEE region (insurance spending 75 EUR
per person in 2006). It is estimated that 87% of Romanians have no voluntary
pension plans, highlighting that the market has significant growth potential-
particularly if real wages continue to grow at current rates. Given Romania's
current low penetration and density levels, convergence with its CEE peers
over the long term is anticipated, highlighting growth potential.
Author: Mihaela CIRCU
on 26.06.2008
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