ERGO International, a subsidiary of Munich Re, has agreed to offload its non-life insurance business in Russia to RESO-Garantia for an undisclosed price.
Image: Headquarters of ERGO in Düsseldorf, Germany. Photo: courtesy of ERGO Group AG.
The sale of the Russian subsidiary is being carried out by ERGO as part of streamlining its international portfolio to focus on markets where it already has a strong presence.
As per the agreement, RESO-Garantia will take over the entire company, including employees, client portfolio and IT systems. The change in ownership of the Russian non-life subsidiary will not have any impact obligations towards ERGO’s existing clients.
The offloaded business registered a premium income of €103.4m in 2017 (GWP) and is in the 17th place on the Russian non-life insurance market.
ERGO International chief operating officer Alexander Ankel said: “With RESO-Garantia, we have found an investor that has an impressive and proven track record in the Russian insurance market.
“Utilizing one of the most comprehensive branch networks in Russia with more than 900 branches and sales offices, RESO-Garantia is perfectly positioned to service millions of customers with tailor-made insurance products.”
Based in Moscow, RESO-Garantia is a property and casualty insurance company that caters to both individuals and legal entities in Russia and across the world. It offers a variety of insurance products and services such as motor, voluntary health coverage, property, life and liability insurance, mortgage, travel, accident, and also reinsurance products.
The acquisition of ERGO’s Russian non-life business is said to be in line with the growth strategy of RESO-Guarantee in key sectors of the retail insurance business.
RESO-Garantia CEO Dmitry Rakovshchik said: “ERGO Non-life is a high quality business with strong consumer loyalty. This acquisition advances the non-organic part of RESO’s growth strategy aimed at expanding its highly profitable motor insurance portfolio and maximizing cost synergies.”
The closing of the deal will be based on receipt of regulatory approvals.
Last October, ERGO divested its Russian life insurance subsidiary to Rosgosstrakh for an undisclosed price. The Munich Re subsidiary will continue its operations on the Russian market through its Europäische Reiseversicherungsgesellschaft ERV travel insurance.
In January 2018, the company entered into a deal to sell its legal insurance subsidiary in Switzerland and also the portfolios of its D.A.S. subsidiaries in Luxembourg and Slovakia to the Allianz Group.