Sogaz and VTB Insurance will create a giant of the Russian insurance market

In a number of market segments, the new company will become a monopolist.
Insurance company Sogaz and VTB Insurance reached an agreement on the merger, a person who knew about this from a Sogaz employee, told a newspaper to Vedomosti, as well as an employee of a consulting company who learned about it from VTB insurance employees. Representatives of companies discuss the details of the future transaction, an employee of one of the associations of insurers knows. Complete the discussion of all the conditions of the merger is planned by the end of the second quarter, one of them clarifies.

Terms of the transaction (distribution of shares, the future manager) interlocutors "Vedomosti" do not know.

Sogaz declined to comment. "We are negotiating with Sogaz, but at the moment there are no solutions. In this regard, comment something we consider premature, "- said the press service of the VTB Group. The representative of the FAS did not say whether the application for approval of the association of insurers entered the service. FAS no longer comments on transactions on economic concentration, he explained.

 
Among the unresolved issues - who will lead the joint company, tell a major insurer and a person who knows about this from employees of both companies. "VTB Insurance" insists that the general director of the company united on the basis of "Sogaz" should be its general director Gennady Galperin (he declined to comment), says a person who knows about this from a company employee.

About plans of "Sogaz" and "VTB insurance" to unite became known in January of this year. Then the general director of a large insurer, as well as four insurers, who knew this from the employees of both companies, told "Vedomosti" about this. VTB President Andrei Kostin in late January in an interview with Reuters confirmed that VTB is considering the possibility of merging the insurance business of the group with Sogaz: it is "possible when receiving a package," but there are no decisions so far.

However, in February, at a teleconference, VTB Deputy Chairman of the Board Herbert Moos said that the group is no longer discussing the sale of the insurance business: "Unfortunately, this did not happen." A group representative then told Vedomosti that in future VTB Group could reach an agreement on selling insurance business.

 
Sogaz is Russia's largest insurer with collections of over 158 billion rubles. in 2017, according to the Central Bank. "VTB Insurance" is the fourth largest premium: 79.7 billion rubles. for the last year.

They are very different, each strong in its segments, and in case of merger will complement each other, the unified company will account for more than 21% of the insurance market, says the deputy director of the rating group ACRA, Evgeny Sharapov. Even the former leader of the insurance market, Rosgosstrakh, did not achieve this share, the analyst of Expert RA, Alexei Yanin, had previously told Vedomosti. According to Sharapov, the combined insurer will dominate many lines of business: for example, in the segment of voluntary medical insurance its share will be 42%, in property insurance of legal entities - 58%, in insurance of citizens against accidents and illnesses - about 45%, respectively.


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