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EBRD makes first investment in Kazakh insurance market
Deal for 35% of Kazkommerts Policy to expand country's insurance sector
The EBRD is making an equity investment in one of the leading Kazakhstan insurance companies, Kazkommerts Policy (KPIC). The investment, the EBRD's first in the country's insurance sector, will help KPIC expand its retail business, further improve corporate governance, facilitate cooperation with international insurance operators and, potentially, attract strategic investors.
The EBRD will acquire 35 per cent of KPIC's capital and voting rights, subscribing for 53,846 ordinary shares. The remaining shares are owned by Kazakommertsbank (KKB), the country's largest bank.
Jonathan Woollett, the EBRD's Director for Non-Bank Financial Institutions, said the Bank sees significant growth opportunities in the Kazakh insurance market and is pleased to make its first investment in a transparent and forward-looking local insurance company. The EBRD expects this investment will help demonstrate the increasing strength of the Kazakh insurance market. In particular, building on strong insurance-sector supervision and successful pension reform, the Bank believes there will be increased opportunities in the insurance sector for the EBRD and other investors.
In the opinion of the Managing Director of Kazkommertsbank, Eldar Abdrazakov, participation of the EBRD in the share capital of the subsidiary insurance company will expand its possibilities. "Above all, this will make it possible to strengthen its capitalisation and increase the volume of premiums collected and the acceptable risks. But the main thing is that we expect the EBRD to contribute its Western standards and its experience of working in the insurance field", considers Abdrazakov.
KPIC is a non-life insurance company that serves mainly corporate clients but is gradually increasing its presence in the retail market. Its majority owner, KKB, has been an EBRD client since 1996 and is an important strategic partner in the Kazakhstan financial sector.
The EBRD is one of the largest investors in Kazakhstan, particularly outside the oil and gas sector. It committed €175 million to the country in 2002 through 14 projects.
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