Talanx is expanding its activities in Turkey by acquiring the property/casualty insurer ERGO Sigorta A.Ş. In conformity with its strategy in the Retail International division, Talanx is again strengthening its presence in one of its five core markets (Poland, Turkey, Brazil, Mexico and Chile) and thereby moving closer to its goal of ranking among the top 5 insurers in Turkey.
As a result of the acquisition the premium volume generated by the division in Turkey will increase by EUR 139 million to more than EUR 400 million and the market share will rise to more than 5 percent. The transaction is expected to deliver a positive profit contribution by the second year at the latest and hence also has favourable implications for the earnings per share. The parties have agreed not to disclose the purchase price. The transaction is still subject to approval by the relevant supervisory authorities, which is anticipated for the third quarter of 2019.
“This acquisition boosts HDI Sigorta from number 11 among insurers in Turkey to the number seven spot. We have thus moved a major step closer to achieving our strategic goal of ranking among the top 5 insurers in each of our core markets. Through economies of scale and by leveraging potential synergies we are aiming to further enhance the operating profit in Turkey”, Sven Fokkema, Chief Executive Officer of HDI International AG and a member of the Board of Management of Talanx AG, commented. “By acquiring the company we are also substantially improving the diversification of our product portfolio.”
In 2018 ERGO Sigorta A.Ş. reported a gross written premium volume of EUR 139 million with a market share of 1.6%. The company employs around 320 staff and has a distribution network comprised of 1,500 intermediaries.
The Talanx subsidiary HDI Sigorta A.Ş. has been operating in the Turkish property/casualty insurance market since 2006. The company offers insurance services through roughly 420 employees, nine regional offices and more than 2,000 insurance brokers and agents as well as ten bank partners. The gross written premium volume booked by HDI Sigorta in 2018 amounted to EUR 278 million, equivalent to a market share of roughly 3.5 percent. With the acquisition of the ERGO subsidiary this market share is now expected to grow to 5.1 percent.