SEB buys majore life insurer

  • 2005-06-15
  • Staff and wire reports
RIGA - SEB Unibanka announced on June 13 that it had signed a deal to acquire 100 percent in Balta Dziviba, the second largest life insurer on the Latvian market, for 7.7 million euros.

"The acquisition is a means for SEB to fulfill its strategy to offer life insurance in all the Baltic countries," the bank said in a statement.

Analysts commented that the deal would invigorate the market of life insurance services, which is currently seeing strong demand.

Balta Dziviba is owned by Balta, Latvia's largest non-life insurer, which in turn is shared by Denmark's Codan (51.9 percent), the EBRD (24 percent) and a Danish government fund for investment in Eastern Europe (24 percent).

Balta Chairman Jesper Rasmussen told the Baltic News Service that the sale of Balta Dziviba was a "logical step" since it had remained the only life insurer in the Codan group.

Codan and Balta are part of Royal & Sun Alliance, one of the world's largest insurance groups.

SEB Unibanka President Viesturs Neimanis was quoted in a press release as saying that "by adding Balta Dziviba to SEB Unibanka we add value to our business in terms of knowledge and strong product competence, as well as market share."

Anders Mossberg, CEO of SEB Asset Management, said, "It is strategically important for the SEB Group to expand its life insurance business building on our leading position in Sweden. We expect strong growth within life insurance also in the Baltic countries. The acquisition is an exciting business opportunity for us."

The Financial and Capital Markets Commission, Latvia's regulatory watchdog, must give its approval for the deal to be finalized.

Analysts said the acquisition would enliven activity on the insurance market. Ivars Prieditis, chairman of the Latvian Insurers Association council and board member of ERGO Latvijas Dziviba life insurer, said the acquisition of Balta Dziviba would change both how the insurer itself works and Latvia's insurance market as a whole. He predicted that Balta Dziviba would be able to cut maintenance costs, while many of its functions will undergo changes.

He also said that other life insurers would benefit from the deal, as "people are curious and will want to learn what other companies have to offer."

Kristine Lomanovska, chairwoman of Sampo Dziviba, a life insurer, said that after Balta Dziviba's change of ownership the insurance market would develop and competition become tougher.

Last year Balta Dziviba posted a loss of 107,000 lats (152,200 euros). According to association data, Balta Dziviba's subscribed gross premiums in 2004 amounted to 2.2 million lats, up 62 percent year-on-year.