Allianz is selling a majority stake in its Russian operations to Interholding following its decision to scale back operations in the country.
In April, Allianz told Health & Protection that it was no longer accepting new business from applicants for international private medical insurance (IPMI) who are residing in Russia.
Interholding is the owner of Russian property and casualty insurer Zetta Insurance. Upon completion of the deal, which is subject to regulatory approvals, Allianz will hold a minority stake of 49.9% in the combined company.
Allianz revealed the transaction is estimated to cost the business around €400m euros on its profit and loss account, largely due to the reclassification of negative foreign exchange impact from shareholders’ equity.
However its solvency capitalisation and cash position will not be affected, the insurer added.
An Allianz spokesperson said that as the deal is cash and solvency neutral, the transaction is equivalent to a contribution in kind, adding the respective valuations of the deal were not being disclosed.
A message on the insurer’s website regarding its operations in Russia said it is “neither insuring new business nor making new investments on behalf of its own investment portfolio in Russia.”
“Our operating entities are no longer underwriting new insurance business in Russia, and are decisively reducing exposure in an orderly manner,” it continued.
“In addition, Allianz is making no new investments in Russia or Belarus on behalf of its policyholders.”
Last month the insurer announced it made a pre-tax operating profit of €3.2bn and also confirmed it had begun the process of offering renewal terms to Aetna’s international private medical insurance clients.
Interholding-owned Zetta Insurance has more than 120 points of sales in Russia, with more than 6,500 agents in more than 150 Russian cities.
The company, which has more than one million customers in addition to small and medium enterprise clients, has partnerships with 350 car dealers and 30 commercial banks in the country.