Dutch financial group Achmea is to sell its insurance business in Bulgaria, Interamerican, to local competitor Euroins. That is the second deal in the Bulgarian financial sector after Germany's BayernLB recently decided to sell MKB Unionbank to First Investment Bank.
While the banking deal was prompted by the need of the German bank to restructure and repay a 10 billion euro government capital injection, the sale of the insurance business is most probably due to the poor growth in the local market that makes it unattractive for foreign investors. Interamerican's business has shrunken considerably for the past few years and its general and life insurance companies have piled up losses.
The acquisition of Interamerican by Euroins will not result in substantial market restructuring but it is a sign of the need for consolidation. In general insurance, Euroins will likely move from the ninth to the seventh position in market share. A much smaller effect is expected in life insurance, where Interamerican accounts for just 0.6% of the premium income.
Read more in Bulgarian here.