EIG entered Belarus upon completion of the acquisition of a unit of Germany's ERGO

6 May 2020 — Andrei Victor
Bulgaria-based EUROINS Insurance Group (EIG) announced it completed the acquisition of RGO Belarus - a non-life subsidiary of Germany-based ERGO, part of MUNICH Re, after obtaining regulatory approvals from Ministry of Antimonopoly Regulation and Trade (MART) and Ministry of Finance.

Last year the Bulgarian company agreed to acquire ERGO's subsidiaries in three European countries - Belarus, the Czech Republic and Romania. The deals for the units of the German company in the Czech Republic and Romania are subject to regulatory approval by the local authorities.

RGO Belarus is the third largest private insurer in the country operating in a sector that is still dominated by state companies. In 2019, the company recorded GWP of approx. EUR 10 million, up by 7.4% compared to the previous year. It occupies the 10th place in the total ranking of the Belarusian insurers in terms of GWP with a market share of around 2%. ERGO Belarus posted a net profit of EUR 0.15 million last year. The solvency ratio of the company, a key indicator for an insurer's stability, is nearly 300%, three times more than the regulatory requirement.

By the end of 2019 ERGO Belarus owned 92,000 insurance contracts signed with more than 67,700 clients. The company employs almost 100 employees and the same number of insurance agents. The Belarusian insurer will be rebranded and is expected to operate under EUROINS brand. The results of ERGO Belarus will be added to EIG's consolidated financial statement in the current second quarter of the year.

The Belarusian insurance market is valued at approx. EUR 600 million annually. In 2019, it grew by nearly 15% compared to 2018. The specific feature of this market is that the popular and obligatory MTPL insurance is still only allowed to be provided by state insurers. At the same time, all the insurance contracts can be signed remotely and fully digital.

Belarus is the fourth country in the region of the former Soviet republics in which EIG's starts operations and the deal for ERGO's unit is the fifth acquisition that the Bulgarian group made there. The Bulgarian insurance group has been operating in Ukraine, Russia and Georgia where it has already taken over four companies. By acquiring ERGO Belarus this region is expected to generate 15% of EIG's premium income and 20% of the net financial result of the group. Thus, by this new transaction, EIG will operate in totally eleven European countries, including its subsidiaries in seven of them - Bulgaria, Romania, North Macedonia, Russia, Ukraine, Georgia and Belarus.

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