January 24, 2019

Sofia, 24th January 2018 - In relation with the decision of the Bank of Greece not to approve the application of Bulgaria’s Euroins Insurance Group AD (EIG), a leading independent insurance group in CEE and SEE and a subsidiary of Eurohold Bulgaria, to buy the Greek life insurance operations of France's Credit Agricole, EIG is expressing its astonishment and disappointment by the decision and at the same time is confirming its intention to develop its business in Greece organically. The group will further grow its activity in the country through its Greek branch opened as part of its strategy to become a leading insurance group in Southeastern Europe.

Regarding the decision of the Bank of Greece to block the deal for Credit Agricole Life, EIG considers that the arguments of the Greek central bank are not described in a professional manner. Furthermore, the group believes that the Greek regulator has not applied the criteria for its evaluation of EIG with the necessary depth, objectiveness and integrity as the article 59 of the Solvency II directive stipulates. EIG thinks that the criteria for evaluation disclosed by the Greek regulator do not correspond with the documents granted by the insurance company and do not contain the necessary objective, detailed and in-depth arguments that one regulator is obliged to set out when it accesses one application for an acquisition. In addition to that, EIG finds out that the arguments of the Greek regulator contain discriminatory and tendentious statements about markets outside the EU on which the group operates. Last but not least, the decision of the Greek central bank has come less than a year after it allowed the insurance company to open a branch in the country applying the same criteria required for issuing a regulatory nod for an acquisition. Considering the  above, EIG will carefully analyze the decision of the Greek regulator and decide further on the next appropriate steps.            

EIG  started operations and offering its products in Greece in 2014 under the freedom of provision of services in the EU in spite of the deep economic and financial crisis that the country faced at that time. In 2017, EIG initiated a procedure via its subsidiary Euroins Bulgaria for opening a branch in Greece. As a result, the Bulgarian Financial Supervision Commission approved EIG’s application to set up a branch in Greece and  sent a notification to the Greek regulatory which itself accepted the notification and allowed the group to establish a branch at the beginning of 2018.           

Among the reasons not to approve the proposed acquisition of Credit Agricole Life by EIG, the Bank of Greece mentions:

  1. The business model and the strategy for development of the buyer as well as the opinion that EIG should focus on the development of its Romanian subsidiary instead of expanding in other markets in CEE/SEE region.
  2. The financial condition and stability of the applicant.
  3. Lack of know-how and experience in life insurance of the potential investor.

Contrary to these arguments, EIG is announcing the following statement:

  1. EIG is well positioned and capitalised for growth and expansion not only in Greece but in the whole SEE region. The group has followed a firm strategic path towards regional expansion which was initially and predominantly targeted at the Balkan countries. However, in the past years it saw its competencies and capacity grow, and that allowed the company to look beyond – at Central Europe, the CIS countries and the Mediterranean. EIG learned to be successful in turbulent times and in a changing, evolving and sometimes insecure environment. More than 80% of the markets where the group operates or where it plans to launch operations, are characterized by low insurance density and penetration, much below the EU average, which provides opportunities for solid growth as the economic growth in the region has picked up. EIG has recently acquired IC Group, one of the leading insurers in Georgia and ERV Ukraine, the travel insurance business of Germany-based ERGO, part of Munich-Re, one of the major reinsurance groups on the global market. In the last couple of years EIG also acquired: Germany-based Talanx Group’s subsidiaries in Bulgaria and Ukraine, operating under HDI brand; Dutch insurer Achmea’s insurance business in Bulgaria, known under Interamerican brand (including its life insurance operations); as well as Australian group QBE’s operations in Romania and Bulgaria. In 2018, the Romanian subsidiary of EIG purchased the non-life insurance portfolio of ATE Insurance Romania, a subsidiary of Greece’s Piraeus Bank, and the group also took over a significant stake in ООО RSO Euroins, a Russian insurer. All the transactions mentioned above have passed successfully the filter of totally five national financial regulators, including the authorities of Bulgaria and Romania that are EU member-states and comply with the Solvency 2 Directive. EIG has been subjected to in-depth research and analysis on its financial condition and stability by each of these five regulators before obtaining successfully regulatory approvals for its acquisitions.
  2. EIG is one of the leading independent insurance groups in CEE/SEE region with gross written premiums in excess of EUR 330 million annually, over 2.5 million customers, 1600 employees and more than 300 agencies/sales points. In 2017, the consolidated revenue of Eurohold Bulgaria, the owner of EIG, exceeded BGN 1.2 billion, up 14% year-on-year, while at the same time the consolidated net profit doubled to around BGN 20 million. The operating profit (EBITDA) grew by 50% on an annual basis to approximately BGN 52 million. The equity of the company doubled, reaching BGN 211 million and the total assets surpassed BGN 1.3 billion. The insurance business of Eurohold, operating under Euroins Insurance Group (EIG) brand, contributed significantly for the results achieved. The revenues from insurance rose 14% compared to previous year up to BGN 970 million while at the same time the recorded net profit increased four times to around BGN 37 million. Just the group's gross written premium (GWP) grew 22% to BGN 645 million. In 2017, the Romanian subsidiary of EIG itself generated GWP of over EUR 233 million, uo 25% year-on-year, and recorded a net profit of EUR 21.5 million.   
  3. EIG provides the full range of insurance products in the areas of general, health and life insurance through its network and subsidiaries and is quite experienced in each segment on the market.