French insurance giant AXA and French banking group BNP Paribas have reached an agreement to establish a partnership in the Ukrainian property and casualty insurance market.
Under the terms of the agreement, AXA will acquire a 50% stake in BNP Paribas’ insurance subsidiary Ukrainian Insurance Alliance (UIA). The 50% shareholding will be purchased from BNP Paribas’ subsidiary UkrSibbank. As a result, AXA will take the management control of the joint company, which will benefit from an exclusive bancassurance distribution agreement with UkrSibbank for an initial period of 10 years.
UIA is primarily engaged in selling individual motor and property insurance through UkrSibbank’s 1,000 branches. In 2006, it more than doubled its revenues compared to the previous year to $35 million.
This partnership will allow both companies to grow faster in the Ukrainian property and casualty insurance market. In addition, UIA will be well positioned to seize the growth prospects of the Ukrainian market by combining the strength of UkrSibbank’s network and AXA’s expertise in insurance product development, client service and claims management.
The transaction is subject to regulatory approvals but is expected to close by the end of 2007.