Allianz To Buy 45% Stake In Russia’s Rosno

Germany’s Allianz continued its move into Eastern Europe with the announcement that it would acquire a 45 percent interest in Rosno, Russia’s third largest insurer, from its parent company AFK Sistema for an undisclosed amount.

Allianz becomes the first major foreign insurance company to acquire a significant stake in the Russian market. It marks an important step in the recovery of the Russian economy following the financial collapse of 1998, and came on the same day that General Motors confirmed a $322 million deal with Avtovaz, Russia’s biggest car maker.

According to a report in the English language Moscow Times, Rosno, which sells both life and p/c products, had gross premium income of $311 million last year, and net assets of $324 million, calculated under Russian accounting standards, which differ from those used in the West. The paper estimated that the deal was in the $30 million range.

Allianz already has a Russian subsidiary, OWAZ, which specializes in international corporate clients. There are no plans to integrate the two companies.

The Rosno purchase is seen by analysts as another move by Allianz to build up its presence in the Eastern European market, where it expects to benefit from higher growth rates than in the West in future years. Russia has huge potential, less than 1 percent of the population has life insurance, and less than 5 percent private health insurance. Rosno’s gross premium income increased by 66 percent last year, and the Russian insurance market as a whole grew by around 60 percent.

Topics Mergers & Acquisitions Russia