Gothaer Group Acquires a Stake in Polskie Towarzystwo Ubezpieczen

Posted on Aug 06, 2010 by Sergio Ulloa (G+)

  German based Gothaer Group has acquired a 45.42% stake in Polskie Towarzystwo Ubezpieczen (PTU) - PTU is one of Poland's largest insurance companies. The acquisition of the substantial stake in the Warsaw based PTU is part of the Gothaer Group's strategy to venture into the growing Eastern European insurance markets. This realizes an important company objective after previous failed attempts to expand their presence in Germany. Gothaer obtained the 45.42% equity in PTU, valued at E34m (US$44 million), from Ciech group, a Polish based Chemical company. The deal comes as a blow to the Polish arm of RE (Polskie Towarzystwo Reasekuracji) who have a 23% stake in PTU. RE initially declined an approach from Gothaer as the company had planned to increase their own stake in PTU. Techwell is another significant shareholder with a 29% stake in PTU, and is in negotiation with Gothaer regarding the possible acquisition of the Techwell share of the Polish Insurer. The rest of PTU is owned by seven smaller shareholders. The move into Poland is seen as a positive move for Gothaer which aims to increase their E4 billion (US$5.2 billion ) insurance premium income - although still significantly smaller when compared to Allianz, the market leader, which has an E28 billion (US$ 36 billion) premium income. The expansion into a growing Europe economy is part of the Gothaer strategy to increase their status in the Central and Eastern European insurance markets. With a population estimated at 38 million, the insurance sector in Poland has experienced significant growth since joining the EU. The demand for products such as life and health insurance grew from 2005-2009, although the premium volume for life insurance fell sharply in 2009 owing to adverse economic conditions. The forecast for the insurance sector in Poland is very positive, with an increase in demand envisaged. Dr Gorg, a member of Gothaer board said: "The Polish economy has an enormous growth potential and has capacity to cope with financial crises........ The high growth rates not only in the insurance sector, the safe legal system, the monetary and cultural ties with Germany are very good basis for our commitment." 2010 has seen numerous takeover and mergers between insurance companies, partly due to changes in business strategies since the 2008-2009 economic upheaval, and changes in world markets. Gothaer moves into an emerging European market through the purchase of one of Poland's largest insurance companies - PTU - with the expectation of significant market penetration. Central and Eastern Europe (CEE) has been a region of strong growth since the early 1990's. This followed the fall of the eastern Soviet bloc, allowing countries in the region to expand their economies. However, since 2008 the demand for insurance products in the CCE has declined slightly, but there are promising signs indicating opportunities for potential growth in the region. In 2008, it was estimated that the CEE region premium income totaled US$93.3 billion, accounting for 2.31% of the global total. A sigma report indicates scope for expansion for the CEE region, in both the non-life and life insurance products. 2008 data from Polska Izba Unezpieczen (PIU) reported that the non-life insurance market in Poland was dominated by motor insurance, with health insurance only contributing PLN 120-120 (US$ 4-5 million) in premiums collected. This was explained by the lack of private health facilities present in Poland, but is seen as an opportunity for Gothaer to penetrate the health insurance market in this country, based on its expertise gained in Germany. Insurances Companies Mentioned Gothaer Versicherung AG Gothaer Versicherung AG is a group company that offers insurance services to companies, individuals, and free lancers. Gothaer insurance has over 3.5 million customer anf 200 years of experience. Polskie Towarzystwo Ubezpiecze? Polskie Towarzystwo Ubezpiecze? S. A., established in 1990, is among the top ten largest insurers in Poland in terms of premiums collected, scale of operations, growth rate and the breadth of product range