Eureko Strengthens Ties with Rabobank; S&P Sees No Rating Change

The Netherlands-based insurer Eureko, the parent company of Achmea, and Holland’s Rabobank Group announced that they are broadening their current co-operation. In a joint announcement the companies said that Interpolis, the insurance arm of the Rabobank Group, is to merge with Achmea, the Dutch insurance arm of Eureko.

At the same time Rabobank’s shareholding in Eureko is to increase from 5 percent to 37 percent. “This transaction will result in an insurance group, which consists of a very large Dutch insurer, and with significant activities in a number of other European countries,” said the bulletin. “The details of the intended transaction are laid out in a Letter of Intent, which has been signed today, in Zeist, Wednesday 27 April 2005, by Gijsbert Swalef, Chairman of the Executive Board of Eureko, and Bert Heemskerk, Chairman of the Executive Board of Rabobank,” it continued. “This is a progression of the earlier co-operation, which was announced in February 2004.”

Standard & Poor’s Ratings Services issued a bulletin indicating that its ratings and outlook on Eureko B.V. (BBB+/Stable/–) and related entities “remain unchanged following the announcement that Rabobank Nederland’s (Rabobank; AAA/Stable/A-1+) Netherlands-based insurance subsidiary, Interpolis, will be merged into Eureko’s Netherlands-based insurance group Achmea.”

S&P said it “considers that this event carries clear positive implications for the Eureko group in the medium to long term, through improved competitive position. The merger will create the largest insurer in the Dutch market, with a market position in the top three in life, non-life, and health businesses.”

The rating agency noted, however, that “in the short term, there are execution risks associated with integrating two large businesses, at a time when operating performance in the Dutch life insurance market is already challenged. It listed the “related entities as: “Achmea Pensioenen-en Levensverzekeringen N.V. (A+/Stable), Achmea Schadeverzekeringen N.V. (A+/Stable), Achmea Ziektekostenverzekeringen N.V. (A+/Stable), Achmea Holding N.V. (BBB+/Stable/A-2), and Achmea Hypotheekbank N.V. (A/Stable/A-1).”

Kick van der Pol, Chairman of the Board of Interpolis, commented: “I am convinced that Interpolis and Achmea will complement each other perfectly, particularly as Eureko is a partner which has a co-operative history. We have achieved a notable position in the market and in this new situation we have the opportunity to strengthen that position, becoming a ‘power brand’ under our own brand name and marketing strategy. This is important as Interpolis can offer significant added value. The merger makes it possible for Interpolis to grow further”.

In the merged entity, Rabobank will remain the principal insurance distribution channel for Interpolis.