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One of the main insurance groups in Southeast Europe (SEE) – the Bulgarian “Euroins Insurance Group” AD (EIG) AD (EIG), part of “Eurohold Bulgaria” AD, finalizes the acquisition of ERGO Belarus after approval of the country’s regulatory authorities – Ministry of Regulation and Antimonopoly Commerce and Ministry of Finance.
ERGO Belarus is a subsidiary of the German ERGO, one of the leading insurance groups in Europe, which in turn is owned by Munich Re, one of the leaders in global reinsurance.
Last year, the Bulgarian company agreed to acquire ERGO insurance companies in Belarus, the Czech Republic and Romania. The deals for the German group’s insurers in the Czech Republic and Romania are awaiting approval from local regulators.
The newly acquired company in Belarus in figures and facts
ERGO Belarus specializes in the non-life insurance segment (civil liability, property, medical, transportation, accident, travel assistance, etc.) and is the third largest private insurer in the country in a sector dominated by companies at this stage. state. In 2019, the company obtained almost 10 million euros in gross premium income, representing an increase of 7.4% compared to the previous year. According to this indicator, the Belarusian company ranks tenth among the country’s insurers with a market share of around 2%. ERGO Belarus made a profit, netting 0.15 million euros last year. Coverage of the company’s capital solvency requirement (SCR), a key indicator for the stability of an insurance business, is almost 300% or 3 times higher than regulatory requirements.
At the end of 2019, ERGO Belarus has 92 thousand active contracts with 67.7 thousand clients. The company’s employees are almost 100. The same number are its insurance agents. The company is expected to change its name and operate under the Euroins brand. ERGO Belarus results will be consolidated in the EIG report for the current second quarter of the year.
The Belarus insurance market is estimated at around 600 million euros per year and last year it increased by almost 15% compared to 2018. A specific feature is that motor liability insurance can be provided at this stage popular and mandatory. only from state insurance companies. At the same time, all insurances can be contracted remotely and completely digitally.
In the context of a coronavirus epidemic (Covid-19), Belarus is one of the few countries in the world where no restrictions are imposed and the country’s economy is operating at full speed as much as possible.
The expansion of the EIG in the region.
Belarus is the fourth country in the region of the former Soviet republics in which EIG begins operations, and the agreement for the ERGO subsidiary in the country is the fifth acquisition by the Bulgarian group in these markets. The Bulgarian insurance group is already doing business in Ukraine, Russia and Georgia, where it has bought a total of four companies in recent years. With the newly acquired ERGO Belarus, the region’s markets are expected to make up 15% of EIG’s total revenue and 20% of the group’s net financial result.
“The agreement in Belarus is part of our strategy for an increasingly active presence in the countries of the former USSR, whose insurance markets are still in the early stages of development, but with great growth potential.” With the acquisition of ERGO Belarus, we are enhancing our association with the German group and further diversifying the group’s product portfolio. We will maintain the focus of the newly acquired company on healthy business growth, increased profitability and improved quality of customer service. At the same time, we will present best practices of our own network activity and offer our new clients a wide range of reliable insurance products, which will contribute to further development of the local market. We continue to partner with ERGO for the other transactions, “said Georgi Markov, Deputy Executive Director of EIG.
Two years ago, EIG acquired the Ukrainian travel company ERV, which specializes in travel insurance. The deal even provided for future cooperation between the two countries in the deal, including a knowledge transfer and an opportunity for the Bulgarian group to sell travel insurance under the ERV brand in Ukraine and other countries in which it operates.
With the new agreement, EIG will operate in a total of eleven European countries, including through its subsidiaries in seven of them: Bulgaria, Romania, North Macedonia, Russia, Ukraine, Georgia and Belarus.
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