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Allianz expands empire with SP

THE WORLD'S second biggest insurer has stepped into the Slovak market with an acquisition of former state monopoly Slovenská Poisťovňa (SP) believed to be worth $170 million.
The Privatisation Ministry on December 20 approved the sale of the state's 67 per cent stake in the company to the German giant Allianz, ahead of Dutch company Aegon. Cabinet was expected to formally approve the ministry's decision in early January.
A further 24 per cent stake, owned by financial group Penta Group, will also be claimed by the German company, giving it a total 91 per cent holding.


The Slovenská Poisťovňa headquarters in Bratislava.
photo: Spectator archives

THE WORLD'S second biggest insurer has stepped into the Slovak market with an acquisition of former state monopoly Slovenská Poisťovňa (SP) believed to be worth $170 million.

The Privatisation Ministry on December 20 approved the sale of the state's 67 per cent stake in the company to the German giant Allianz, ahead of Dutch company Aegon. Cabinet was expected to formally approve the ministry's decision in early January.

A further 24 per cent stake, owned by financial group Penta Group, will also be claimed by the German company, giving it a total 91 per cent holding.

The deal leaves Allianz, which already has operations in Slovakia, in charge of the dominant insurer on the market. It also brings the full liberalisation of the financial markets a step closer following successful sales of state banks in 2001.

Allianz officials said after the deal that the company will set about building a new business focus for SP, asset management, following the Slovak firm's loss of its monopoly on third-party liability car insurance in January this year.

Sector analysts are now predicting Allianz's acquisition will herald a new era of better quality services on the Slovak insurance market.

"It's good news. There will be better competition and better services and Allianz will most likely bring a lot of better know-how. Clearly the customers will benefit," said Tomáš Kmet, analyst at Slovenská sporiteľňa.

He also said the sale itself was another important step in removing state influence from the financial sector.

The privatisations of the three largest state banks, Slovenská sporiteľňa, Všeobecná úverová banka and Investičná a rozvojová banka, to foreign finance houses over the last 13 months have already transformed the Slovak financial sector.

SP, which was chased by Dutch Eureko and Italy's La Fondiaria as well as Allianz and Aegon, is one of the last companies to be sold off in the financial sector.

"It's generally positive that the restructuring of the sector went well last year and that there is now almost no state presence there. Almost all the companies are in private hands, guaranteeing good competition," said Kmet.

Slovenská Poisťovňa held 48 per cent of the insurance market last year, including 57 per cent of the non-life market and 35% of the life market. Allianz held a nearly 10 per cent share of the non-life market.

In the first three quarters of this year Slovenská Poisťovňa's premiums rose 15 per cent to Sk12.38 billion ($258 million), 72 per cent of which was in the non-life market. SP expects a profit of Sk233 million in 2001.

Allianz, which has been present in Slovakia since 1993, holds an 8 per cent share of the Slovak insurance market and is the fourth largest insurer in Slovakia in written premiums.

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