Romanian Bank for Development (BRD) – Societe Generale Group plans to enter the life insurance market with an investment of 7.5 million euros, up to this year-end, through a branch of the specialized company in France, SogeCap.
The new BRD division, to be named BRD Life Insurance, is currently waiting for the approval of the Insurance Surveillance Commission (CSA).
As such, the French are setting up their own insurance company shortly after selling the 25 percent participation in Asiban, the third largest player on the insurance market.
BRD, together with the Romanian Commercial Bank (BCR), Transilvania Bank and the Savings Bank (CES) sold 100 percent in Asiban to French Groupama Group, within a transaction of 350 million euros, the biggest up to now in the insurance field, Ziarul financiar reports on April 18.
Till autumn, the four banks are to cash 87.5 million euros each, amounts set to significantly influence their financial results.
Initially, the French had announced their intention to enter the life insurance market in September last year, and they reconfirmed their plans in February, underlining that the company could become operational until August.
On the mandatory pensions market, BRD Pension Fund, in which SogeCap is majority shareholder, is the ninth largest player on the market, with almost 100,000 participants in the fund it manages.
Life insurance market is increasingly attractive to investors, under conditions in which profits are much higher than in the general insurance field. In 2007, the first gross premiums underwritten by local life insurance companies stood at more than 432 million euros and this year they could rise to half a billion euros.
The growth pace of the market speeded up, in 2007, by 26 percent compared to some 10 percent advance registered in the previous year.
Biggest players on the life insurance market are ING, AIG Life and Allianz-Tiriac. ING reported for last year business worth 150.2 million euros, 21 percent higher than the level attained in 2006.