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EBRD helps develop Armenian insurance sector
Bank acquires 35 per cent stake in local company
The EBRD is acquiring a 35 per cent stake in Cascade Insurance and Reinsurance
Company (CIRCO), a leading insurance company in Armenia, to help meet the
growing demands for insurance in the country. It is the Bank’s first
investment in Armenia’s non-banking financial sector.
The EBRD’s AMD88.4 million ($200,000) investment will help financially
strengthen CIRCO, enabling the company to increase the amount of risk it can
retain that is not reinsured, and continue broadening its product range,
particularly for non-life insurance products such as motor, cargo and
property. The Bank’s investment – which could increase by up to an additional
AMD125 million in the event of further capital increases by CIRCO – should
also help raise values in the insurance industry by promoting international
standards of best insurance practice.
Kurt Geiger, EBRD Business Group Director for Financial Institutions, said the
project is very important because it will help promote Armenian financial
services to western standards. More and more people and companies in Armenia
are recognising the benefits of insurance, which is fuelling the growth of the
market, Mr Geiger said. By working with a company committed to Armenia and the
development of its financial products to western standards, we are helping
meet that demand, he added.
Established in 2004, CIRCO offers both commercial and personal insurance in
the non-life and life sectors. While the EBRD will own just over a third of
the company, the remaining shares are owned by CIRCO’s parent company Cascade
Capital Holdings, which in turn is owned by the Cafesjian Family Foundation,
set up in 1996 by Gerard L Cafesjian, an American of Armenian descent.
The EBRD’s investment in CIRCO is a significant event for the Armenian
insurance sector, said Jonathan Stark, Deputy CEO of Cascade Capital Holdings.
It is also a major step towards Cascade Capital’s goal to become a financial
market leader in Armenia and the Caucasus, Mr Stark said.
The project forms part of the EBRD’s strategy to support the expansion and
development of the non-bank financial institutions sector, and particularly
insurance, in its countries of operations where this sector is
under-developed. The Bank is one of the largest investors in Armenia, having
invested more than €100 million in 23 projects.
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