Vienna Completes Purchase of Erste Group Operations

VIENNA, Austria, Sep 23, 2008 (A. M. Best via COMTEX) -- VNRGF | Quote | Chart | News | PowerRating -- Vienna Insurance Group said it successfully bought the insurance operations of Erste Group Bank A.G. in Austria and in Central and Eastern Europe.

The insurer said it received approval from the relevant competition and local regulatory authorities in Austria, Croatia, the Czech Republic, Slovakia and Hungary. The total value of the transaction comes to 1.45 billion euros.

According to Vienna, a crucial part of the deal is a long-term distribution agreement, which provides it with access to the nationwide sales network of Erste Group, consisting of more than 16 million customers and 2,900 branches. In return, Erste Group will obtain access to the 10 million customers of Vienna in those countries in which both partners are currently active.

Vienna first announced its intention to acquire the Erste Group operations when it released its 2007 results. Vienna reported a 36.2% rise in pretax profit, to 437 million euros in 2007. Group premiums rose by more than 1 billion euros to 6.9 billion euros (BestWire, March 27, 2008).

According to Vienna, contributions to group premiums from Central and Eastern European markets represented 43% of the 2007 total. In its property/casualty segment, the CEE region represented about 60% of total premiums. In the life segment, the region contributed 30% of premiums.

(By Marc Jones, London news editor: marc.jones@ambest.com)

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