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HUNGARY: Green light from the Central Bank for the three VIG units' merger

The National Bank of Hungary (MNB) announced on its website it approved the merger of the three local subsidiaries of the Austrian VIENNA Insurance Group into one company. Gabor LEHEL, CEO of UNION Biztosito, will be Chairman of the Board of the resulted entity after the merger.

In April 2017, the Austrian insurer said ERSTE Biztosito and VIENNA Life Biztosito will merge into UNION Biztosito. At that time, local media wrote (BBJ.hu) that VIG is considering this merger to strengthen its commitment to the Hungarian market, "as Hungary has been named as one of the four markets where the group is aiming to reach at least a 10% market share".

Click HERE to read the MNB's decision.

According to the FY2016 figures published by MABISZ - the Hungarian Insurance Association, at the end of 2016 the three VIG units had a aggregate market share of 7.6%, (GWP of HUF 69.8 billion / EUR 225 million).

Per units, UNION was the largest VIG subsidiary - GWP of EUR 117 million (3.94% market share, ranked 9th of 30 insurers), followed by ERSTE - GWP of EUR 59 million (1.98% market share, ranked 13th) and VIENNA Life - GWP of EUR 49 million (1,66%, ranked 14th).

In last few weeks, the Austrian insurer was very active announcing at least three merger operations:

  • In December 2017, VIG said it plans to merge its Czech subsidiary Pojistovna Ceske sporitelny (PCS) with its Group company KOOPERATIVA pojistovna with effect from 1 January 2019.
  • At the same time, Croatian bancassurer ERSTE osiguranje is due to merge with WIENER osiguranje at the end of April 2018, subject to the approval by local authorities.
  • More than that, before the beginning of the New Year 2018, the Latvian supervisory authority approved the merger of the two VIG subsidiaries InterRisk VIG and BTA Baltic Insurance Company.

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