AlfaStrakhovanie acquired a subsidiary of Atradius Group

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AlfaStrakhovanie plans to develop in the trade credit insurance segment by acquiring a subsidiary of the international group Atradius. According to experts, the segment can be profitable with a careful approach to doing business, which largely depends on the competence of credit underwriters. Nevertheless, they point to a possible loss of customers and difficulties with reinsurance.

AlfaStrakhovanie, one of the largest insurers in the Russian Federation, announced the completion of a deal to acquire 100% of Atradius Rus Credit Insurance, a subsidiary of the Atradius international group. The Group specializes in protecting businesses from the risk of default on trade credits.

AlfaStrakhovanie CEO Vladimir Skvortsov said that the company sees prospects in the development of trade credit insurance and intends to retain the team, competencies and key business processes in the acquired company.

According to the results of 2022, the AlfaStrakhovanie Group ranked fifth in terms of collections (111 billion rubles), follows from the data of Expert RA. More than 31 million people and over 125 thousand enterprises use the services of AlfaStrakhovanie. Atradius Rus Credit Insurance (then Atradius) received a license to carry out insurance activities in Russia at the end of 2014. According to Expert RA, at the end of 2022, it ranked 46th in terms of fees (more than 2 billion rubles). The size of the authorized capital is 300 million rubles.

Since the beginning of 2022, a number of companies with foreign owners have left the insurance market. In particular, Zurich (part of the Zurich Insurance Group) was sold to management. After renaming to Zetta Insurance, in 2023 it acquired the Russian business of the Allianz insurance group. Interros acquired the stake of the French banking group Societe Generale in Societe Generale Insurance and Societe Generale Life Insurance. ERV Travel Insurance transferred the insurance portfolio to Euroins (see “Kommersant” dated May 23, 2022).

According to Kommersant’s interlocutor in the market, what Alfa is going to do now “fits into the concept of building competencies in a particular area.” The deal as a whole is in the logic of acquiring medium-sized specialized insurers to strengthen market positions in the respective segments, says independent expert Andrei Barkhota.

Experts agree that the transaction price was low. According to Mr. Barhota, taking into account the participation of non-residents, the actual transaction price may be in the range of 0.3-0.6 of the capital of Atradius Rus Credit Insurance. Professor of the Financial University under the Government of the Russian Federation Alexander Tsyganov suggests that the discount can reach 30-50% to the market price with a repurchase option in the future.

The trade finance insurance market could be lucrative, but “only if carefully crafted,” experts say.

Oleg Khanin, General Director of the Soyuz Insurance insurance broker, believes that the loss ratio for this type depends on the quality of the portfolio, the competence of credit underwriters and other specialists. In trade credit insurance, the legal department plays a special role because companies face the challenge of collecting past due receivables, he adds.

However, Kommersant’s interlocutors also note high risks. According to one of Kommersant’s sources, the credit insurance market requires significant reinsurance capacities, which can now be provided only by RNRC, “known for its conservative attitude to credit risks.” Therefore, “difficulties can be foreseen” with the placement of a risk portfolio in reinsurance, he believes. Mr. Tsyganov believes that AlfaStrakhovanie may also lose some of Atradius’ clients. Foreign insurers, he explains, usually insure foreign clients, so someone can leave Russia after the insurer or simply refuse to insure with the new owner due to a brand change.

Julia Poslavskaya

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