Acquisition opens door to the “rapidly growing” Russian non-life market

Russia

Liberty Mutual Insurance Group has announced the acquisition of Russian insurance company KIT Finance Insurance from KIT Finance Holding Company (LLC), the ultimate owners of which are JSC “Russian Railways” and NPF “Blagosostoyanie” (the pension fund company of Russian Railways).

The acquisition allows Liberty Mutual to enter Russia’s $21bn property and casualty insurance market.

KIT Finance Insurance began operations in mid-2008 as a direct distribution insurer providing primarily automobile and property insurance in St Petersburg and Moscow. Since then it has become a multi-line, multi-distribution channel company with its own sales force as well as multiple bancassurance and affinity partnerships.

“We believe KIT Finance Insurance provides an attractive platform from which to invest in the rapidly growing Russian non-life insurance market,” said David Long, president and chief executive of Liberty Mutual Insurance Group. “It’s a dynamic company with a driven management team as indicated by annual growth of 27%.”

The parties have not disclosed the financial terms of the agreement, though KIT Finance Holding Company stated the proceeds would be used to repay a loan of “Russian Railways” to KIT Finance Investment Bank.

Headquartered in St Petersburg, the company recently expanded operations into the Russian cities of Novosibirsk, Perm, Orel and Krasnoyarsk. It wrote nearly $50m in gross written premium in 2011, with approximately 63% coming from automobile insurance.

Liberty Mutual Insurance Group reported net written premium as of 31 December 2011 of $31.2bn, of which or 26% came from its international operations.

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