The Moscow-based insurance company, Renaissance Strakhovanie, is to acquire 100 percent of Neva Progress, one of the Northwest’s leading insurers, the companies confirmed Wednesday.
Renaissance expects its premiums to reach a total of $250 million by the end of 2006, a figure which would make it one of the ten largest insurance companies in the country.
“We are satisfied with the deal,” said Boris Yordan, head of Sputnik Group, Renaissance Strakhovanie’s main shareholder. “For us, the insurance market is a strategic investment, and Progress Neva is one of the most promising companies in the key Northwest market,” he said.
Market insiders saw this development as another step in the consolidation of the Russian insurance industry. Recently, the insurance market has seen many large companies buy up smaller regional outfits. According to Alexander Kulikov, the director of the St. Petersburg branch of Spasskie Vorota insurance company, “the buyout of Progress Neva, which can hardly be called ‘insignificant,’ represents the next stage [of consolidation], when large market players buy up large regional companies.”
Kulikov welcomed the move. “The big insurance company will benefit both the state and clients needing insurance,” he said, adding that in the future the Russian insurance market will be shared between ten to fifteen big players.
The entrance of a Moscow-based company into the St. Petersburg market is both logical and natural, said Andrey Sumbarov, president of the regional union of insurers, in an interview Thursday. Renaissance does not yet have a strong presence in the city’s market, but this acquisition will help the company attain a bigger share of what is a very attractive market, Sumbarov said.
“I think that for such a major company, it is economically beneficial to buy out a local firm rather than just opening new branches in the region,” he said.
News source: times.spb.ru
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