RUSSIA: SOGAZ and VTB merge completed
SOGAZ is the acquiring company of insurance assets, and VTB gets a 10% share, financial compensation, and a place in the Board of Directors for the merged company. After integration, the new company will work under the SOGAZ brand. Based on the preliminary estimation of experts, total GWP of the merged company in 2018 may exceed RUB 330 billion and assets up to RUB 670 billion. According to the Chairman of the board of SOGAZ group, Anton USTINOV, after the merger SOGAZ plans to take 20% of the market in Russia.
"The merger of the two out of three biggest non-life insurers in Russia will lead to creation of a new market leader. The market consolidation will be more intensive and the share of TOP-5 may rise above 50%," said the Head of insurance ratings of the National Rating Agency, Tatiana NIKITINA.
"It is obvious that the merged company will be able to offer huge reinsurance capacity to local insurers and thus positively affect the market situation," explained the Head of the Department of Insurance and Social Economics at the Financial University under the Government of the Russian Federation, Professor Alexander TSYGANOV. The managing director for insurance and Investment Ratings of Expert RA, Alexey YANIN, believes that after the merger, SOGAZ will keep its dominating position in large business insurance and voluntary health insurance, as well as increase its share in bancassurance. According to YANIN, this merger will not significantly influence competition, since even before the merger no one was really competing with SOGAZ.
Based on 2017 results, SOGAZ was the market leader. VTB Insurance took 4th place in terms of GWP.
For approximate calculation
*EUR 1 = RUB 74.4189 (01.11.2018)