FINANCIAL MIRROR EXCLUSIVE
— Demco seeks M&As to expand to Europe —
Demetris Kontominas, one of the shrewdest dealmakers in the insurance and financial services sectors in Greece and southeastern Europe, will probably make a bid for InterLife Insurance in Cyprus in order to secure a life insurance permit and expand his Demco Insurance portfolio beyond the island to the rest of Europe and perhaps even the Middle East.
Ironically, Kontominas would be buying back a company he created nearly two decades ago, called Interamerican at the time. In February this year, the European insurance giant Eureko sold 98.9% of the share capital of Interlife Insurance Co. and 100% of the road assistance network, Interamerican Voithias, to a group of investors under the umbrella of Rodardo Ltd, with veteran excecutive Michalis Michaelides staying on as Managing Director of Interlife in Cyprus.
With many banks rapidly offloading their European insurance arms in order to avoid stringent liquidity requirements in accordance with the Solvency II capital adequacy regime, several bank-owned subsidiaries are up for grabs. However, company insiders at Demco Cyprus say that the rumours regarding the takeover of Alpha Insurance are “most unlikely” as there seems to be far greater interest in InterLife. The Financial Mirror is also aware of a multi-million outstanding claim against Alpha Insurance that could hamper the prospects of a takeover, even though officials at Demco believe that any such claim would probably have been provided for.
Alpha Insurance is also burdened with an unsatisfactory performance in a highly competitive market, in contrast to the success that parent Alpha Bank has enjoyed in Cyprus, with a very high penetration rate in the retail and corporate banking sector.
As at the end of May, Alpha’s five life funds had a total value of EUR 23.6 mln, while InterLife’s three funds had a value of EUR 49.3 mln, representing a market share of about 6%.
With only two years of activities, Demco currently has a market share of about 1-1.5% of the General insurance market of Cyprus, and even smaller 0.5% share in Greece.
