The European Bank for Reconstruction & Development (EBRD) has declared its acquisition of a 10% stake in RESO Warranty-insurance firm for a sum of $ 150 million.
It's the biggest investment ever that the EBRD made in any Russian firm, also its largest investment in insurance sector, which is rapidly growing in Russia. EBRD intends to carry on with investments in insurance sector this year, as published by Kommersant.
During 2006, EBRD invested 374 million Euro in shares in Russia. The Bank has approved worth $ 10 million's investments in Renaissance life insurance firm and another 35 million Euroin Direct Insurance.
Russian insurance sector is swiftly increasing sales amidst a flourishing economy and sales' profile is turning towards more voluntary & legitimate insurance forms. Industry sources have reported that consumers are purchasing more real estate, accident, health and other valid policies for life insurance and comparatively less govt. mandate coverage & life insurance designed for concealing income and evading taxes, which earlier made a vast majority of premiums.
The Government of Russia and insurance sector indicate greater acceptance of overseas firms as well as global best practices as the firms in Russia gain self-confidence & appreciate the prospective of greater consumer acceptance for quality products.
Russia is going through an integration process in to the world financial industry. Increasing collaboration with worldwide financial institutes & developing mutually advantageous economic relationships are the top priorities for further growth of Russian economy all together and particularly of the insurance market.
In insurance, combination of expected liberalization of market, weak competition, and huge pent up demand provide a lucrative target for key foreign firms, which bring innovative technology, professionalism, and experience.
As per the views of a research analyst at RNCOS, "Given the low ownership level by the veteran strategic investors as well as the initial development stage of the insurance market in Russia, this investment's transition impact is believed to be significant. At present, Insurance Group Pohjola is among the handful of foreign investors making their presence felt in the insurance market in Russia, and the involvement of EBRD supports the efforts of Pohjola to further strengthen Russia's insurance business".
Related Market Research Reports:
Russian Insurance Industry Forecast to 2010
Emerging Rural Insurance Market in India
Poland Insurance Market Forecast (2008-2012)
