OTP Bank and Groupama to form Emerging Europe insurance partnership

OTP Bank and Groupama have agreed today an exclusive long term regional partnership covering the distribution of life insurance, non-life insurance and banking products.

Groupama has agreed to purchase from OTP Bank 100% of OTP Garancia, one of the leading insurance companies in Hungary together with its wholly-owned insurance subsidiaries in Bulgaria, Romania and Slovakia. As part of its commitment to a regional partnership with OTP Bank and in order to reinforce the distribution agreements, Groupama has also committed to acquire up to 8% of the existing shares of OTP Bank.

 

“This transaction is an excellent opportunity to extend our universal financial services model and to grow our insurance offering to OTP Bank customers throughout the CEE and CIS”, said Dr Sándor Csányi, chairman and CEO of OTP Bank. “We have grown OTP Garancia over the last 10 years from being a small domestic loss-making insurer to one of the largest composite insurers in Hungary with promising international operations. We believe that the continued growth of OTP Garancia throughout the CEE region can be best supported through ownership by a strong European insurer such as Groupama. Providing more that 10 million banking customers across the region with market leading risk and savings insurance products remains a priority for OTP Bank. In partnership with Groupama, we will be able to continue to do this in Hungary and expand the breadth of our financial services product offering across the region. In addition, we are very pleased that Groupama has committed to support OTP Bank’s overall regional strategy through the acquisition of a meaningful strategic stake.”

“The CEE and CIS regions are attractive markets for Groupama who views this transaction as a unique opportunity to enhance its footprint in this promising region. The increasing prosperity as countries join the EU or converge to EU levels as well as a relative under-penetration of insurance products in countries with large populations are significant future growth catalysts for the region. Through this regional partnership with OTP Bank combined with the acquisition of OTP Garancia in four countries, together with our existing operation in Hungary and our recent acquisition in Romania, Groupama has a platform to be a significant international player across the region. We view this transaction as a springboard for our Emerging Europe growth strategy, enabling our entry in new markets and accelerating the development of our business in the region through the leverage of the partnership with the largest independent bank in the CEE region with over 10 million clients. The focus on the bancassurance distribution channel in the partnership is complementary to our multi-distribution business model and will create significant mutual value to both partners in the future”, said Mr Jean Azéma, CEO of Groupama.