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EBRD helps found new Russian life insurance company
Target is Russia’s growing middle class
The European Bank for Reconstruction and Development has joined forces with
one of Russia’s leading insurance groups to target the huge potential for life
policies in a country where a growing middle class is in future expected to
seek new ways of converting rising incomes into savings.
The EBRD has agreed to acquire a stake of 30 per cent in Renaissance Life
Insurance, founded by Russia’s Renaissance Insurance Group. Total investment
by both shareholders is expected to reach $36 million by the time planned
capital increases are completed over the next few years.
Developing Russia’s financial markets and broadening the range of services
available to the public has been a long-term goal of the EBRD, Bank President
Jean Lemierre said at a signing ceremony in London.
It is clear that both the non-life and life insurance sectors are poised for
strong growth in Russia as corporate activity increases and personal incomes
rise. Companies active in this sector will then need significant capital
injections and the EBRD is showing the way through this project, Mr Lemierre
added.
Boris Jordan, President of the Sputnik Group, the main shareholder in
Renaissance Insurance Group, said: “Life insurance is a market which will
demonstrate fast growth in the nearest future. It is extremely important for
Renaissance Life Insurance to be among the leaders in that market.”
The task of Renaissance Life Insurance will be to sell rouble-denominated life
insurance products to individual customers in Russia, where the number of
middle-class households in the country’s 30 largest cities is now estimated at
5 million.
Classical life insurance products have achieved only negligible penetration of
the Russian market, compared with eastern Europe, where premium income on such
policies is now up to the equivalent of 2 per cent of GDP.
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