AXA, BNP Paribas join forces in Ukraine property, casualty insurance

AXA and BNP Paribas announced they have reached an agreement for the establishment of a partnership on the Ukrainian property and casualty insurance market.

AXA will acquire from BNP Paribas’ subsidiary UkrSibbank a 50% stake in its insurance subsidiary, Ukrainian Insurance Alliance (UIA). AXA will take the management control of the joint company, which will benefit from an exclusive bancassurance distribution agreement with UkrSibbank for an initial period of ten years.

UIA sells mostly individual motor and property insurance through UkrSibbank’s 1000 branches.

In 2006, it more than doubled its revenues compared to the previous year to $35 mln.

Following this operation, UIA will be well positioned to seize the growth prospects of the Ukrainian market, by combining the strength of UkrSibbank’s network and AXA’s expertise in insurance product development, client service and claims management.

The Ukrainian insurance industry is still very fragmented with top ten players, including UIA, controlling just above 40% of the market. It enjoys very strong growth potential, with 47 mln inhabitants and a very low penetration rate.

Completion of the transaction is subject to customary regulatory approvals and is expected to take place before year-end 2007.

This new partnership will allow AXA and BNP Paribas to grow faster in the promising property and casualty Ukrainian market. This deal mirrors AXA and BNP Paribas’ profitable partnership on the French property and casualty market.

UkrSibbank, the Ukrainian retail subsidiary of BNP Paribas (which controls 51% of the bank), is the third largest bank in Ukraine by assets. The bank employs 10,500 people in Ukraine and has nearly 1 mln individual customers and 69,000 corporate customers.