In a major shake-up of Italy’s
insurance market, Italian bancassurer Unipol Gruppo Finanziario
(UGF) and French bancassurer BNP Paribas have agreed terms to end
their joint venture (JV), BNL Vita, the life insurance distribution
arm of BNP Paribas’ Italian banking unit, BNL Group.

Under the terms of the agreement BNP Paribas
has an option to buy the 51 percent of BNL Vita’s share capital
held by UGF at a basic price of €280.5 million ($404 million),
while UGF has an option to sell its interest to BNP Paribas at a
basic price of €270.3 million. The options are exercisable in July
2011.

UGF’s JV with BNL Group dates back to 2000,
when it acquired a 50 percent stake in BNL Vita. Seeking to secure
control of BNL Vita, UGF launched a bid to acquire BNL Group in
2005 but failed as a result of the merger’s rejection by Banca
D’Italia, Italy’s central bank.

BNP Paribas went on to acquire BNP Group in
2006 and in the same year agreed to sell an additional 1 percent
stake in BNL Vita to UGF.

Italy’s sixth-largest bank, BNL Group has some
2.6 million private customers, about 40,000 business and
institutional customers and 850 branches.

According to BNP Paribas, it considers Italy
to be its second most important market after France.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

From UGF’s perspective, loss of BNL Vita’s
sales contribution will be significant. Based on figures released
by UGF, in the first nine months of 2009 BNL Vita generated premium
income of €2.42 billion, up 128 percent compared with the same
period in 2008.

UGF’s wholly-owned composite insurance unit,
UGF Assicurazioni, generated life insurance premium income of €1.61
billion, an increase of 19.5 percent.

UGF Assicurazioni, Italy’s third-largest
insurer, came into being on 1 February 2009 following the merger of
Unipol Assicurazioni and Aurora Assicurazioni.

In 2008 UGF Assicurazioni reported total
premium income of €5.89 billion, €3.81 billion from general
insurance business and €2.08 billion from life business.

Acting to fill the looming gap in its sales
and distribution capabilities, UGF has entered into an agreement
with Italian bank Banca Popolare dell’Emilia Romagna (BPER) to
acquire from it a 60 percent stake in Italian life insurer Arca
Vita for €274 million.

In addition, Arca Vita will pay Italian bank
Banca Popolare di Sondrio (BPS) €43.42 million to acquire its 28.95
percent stake in general insurer Arca Assicurazioni.

This will increase its stake in Arca
Assicurazioni to 93.03 percent.

In tandem with the acquisitions, UGF has
entered into a 10-year exclusive distribution agreement for life
and general insurance with BPER and BPS.

Arca Vita and Arca Assicurazioni distribute
products through 160 of their own agencies and some 2,000 bank
outlets, primarily those of BPER and BPS.

UGF’s own banking operations are conducted
through its subsidiary UGF Banca, which is focused on the retail
market and small and medium-sized businesses. At the end of 2008,
UGF Banca had 299 branches of which 185 incorporated insurance
agencies.