Russia: SOGAZ looks to acquire VTB Insurance

SOGAZ Insurance Group is considering the possibility of further increasing its market share by acquiring VTB Insurance, said www.asn-news.ru quoting its own sources on the insurance market.

According to mentioned sources, VTB Insurance is a captive insurer which mainly undertakes the business provided to it by banks of the VTB Group: "the chances of VTB Insurance to become a classical market insurer are minimal. Therefore, for shareholders, the option of selling the asset to SOGAZ could be more profitable, which, in turn, would sell products through VTB Group banks for high commission".

The sources estimate the value of the asset at about RUB 300 billion: "For SOGAZ, it will be problematic to acquire from own funds and it is possible that the insurer will borrow funds, as well as a third party may appear in the transaction - a bank that will receive a stake in the joint insurer".

In 2016, SOGAZ for the first time took the first place in the ranking of companies with 12.1% market share and GWP of RUB 143 billion, up by 15.9%. VTB Insurance in 2016 has been ranked on the seven places with a market share of 5%.

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