Fortis and BNP Paribas Assurance acquire a majority stake in UBI Assicurazioni, one of the leading non-life bancassurance players in Italy. UBI Assicurazioni enters into a long term exclusive distribution agreement with UBI Banca, a Top 5 Italian bank.
Fortis and BNP Paribas Assurance announce the acquisition of 50% + 1 share of UBI Assicurazioni, a market leader in property and casualty bancassurance in Italy. The transaction will be executed through a holding company (F&B Insurance Holdings), which will be held by Fortis (50% + 1 share) and BNP Paribas Assurance (50% -1 share). UBI Assicurazioni is currently 100% owned by UBI Banca. UBI Banca will keep 50% – 1 share. Fortis and BNP Paribas Assurance will pay a consideration of EUR 120 million in cash on completion. An additional consideration of approximatively EUR 40 million will be payable to UBI Banca in cash, dependent upon the achievement of certain volume thresholds in the future.
Upon completion of the transaction, Fortis and BNP Paribas Assurance will build upon UBI Assicurazioni’s capabilities to further develop and market non-life insurance products and services, such as car insurance, household insurance and non-life creditor insurance. The products will continue to be distributed essentially via the retail branch networks of UBI Banca, with which UBI Assicurazioni will enter into a long term exclusive distribution agreement.
UBI Assicurazioni is one of the leading non-life bancassurance players in Italy. In 2008, UBI Assicurazioni recorded gross written premiums of EUR 238 million. UBI Assicurazioni has 20 years experience in the Italian market where it distributes its products through the 2,000 branches of UBI Banca. UBI Banca is one of Italy’s top five banks with four million customers, a market share of approximately 6% and a strong presence in the wealthiest areas of Italy. UBI Banca is a cooperative banking group listed on the Milan stock exchange.
The Italian non-life insurance market harbors considerable potential for bancassurance. Italy is Europe’s fifth-largest non-life insurance market with total non-life GWP of EUR 38 billion in 2007 and has experienced steady annual growth in excess of 4% since 2000. In 2007, only 1.8% of non-life gross written premiums were sold through the banking channel. However, bancassurance in Italy is expected to catch up with other European countries and therefore
offers excellent growth opportunities.
This transaction will enable Fortis to use its non-life bancassurance expertise to further develop opportunities to cross sell insurance products to banking customers and enhance the product mix of the P&C portfolio. The transaction will also enable Fortis to establish itself rapidly in the
Italian market, and to jointly assess with BNP Paribas Assurance new growth opportunities.
This operation provides BNP Paribas Assurance with an opportunity to accelerate the growth of its non-life insurance business in Italy, where it has a strong expertise in relation to creditor insurance through its subsidiary Cardif.
Commenting on the acquisition of Ubi Assicurazioni, Bart De Smet, Chief Executive Officer of Fortis said: “This transaction is a great opportunity for Fortis to play its strengths: bancassurance, non-life insurance expertise and long-term partnerships. We are looking
forward to teaming up with BNP Paribas Assurance, with whom we have established an excellent relationship, to generate strong and profitable growth in this new strategic partnership with UBI Banca, and with a view to exploring other opportunities in the future.”
Eric Lombard, Chairman and Chief Executive Officer of BNP Paribas Assurance added: “This transaction constitutes a new step forward for BNP Paribas Assurance in Italy. It is perfectly in line with our strategy, which calls for an expansion of our product and service portfolio, particularly in Property and Casualty insurance, to better address the expectations of our partners. This operation is the first tangible initiative within the framework of the strategic partnership in insurance between Fortis and the BNP Paribas group. I have every confidence that it will prove a strong success.”
The transaction is subject to regulatory approvals from relevant competition authorities and regulators. Transaction closing is expected to take place before the end of 2009.
Transaction structure :
