AXA has agreed to sell its life and savings insurance operations in Romania to Vienna Insurance Group (VIG) and exit the Romanian market.

The buyers are the two VIG Group companies BCR Life and Omniasig. The acquisition is subject to approval by the local authorities.

Commenting on the acquisition, VIG CEO Elisabeth Stadler emphasised the growth prospects in Romania.

She said: “The Romanian life insurance market grew 11 percent in 2015. Our existing VIG Group company BCR Life, the second-largest player in the Romanian life insurance market with a market share of 14.4 percent, also recorded significant growth in the previous year.”

According to Stadler, GDP growth forecasts for Romania are promising as well: Thanks to a rapid increase in private consumption, experts expect GDP to grow by more than four percent this year. GDP growth in 2017 and 2018 is expected to be around 3.5 percent.”

The completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals.

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Timetric IIC analysis on Romanian life market

Boosted by economic recovery, Romania’s life insurance market is expected to rise from RON 1.56bn in 2014 to RON 1.84bn in 2019, in terms of gross written premium, according to Timetric research.

The report, Life Insurance in Romania, Key Trends and Opportunities to 2019, which is available at Timetric’s Insurance Intelligence Center, highlights a low penetration rate, economic recovery and rising life expectancy as the key drivers for the Romanian life insurance sector.

Romanian life insurance penetration stood at 0.23% of the GDP in 2014, lower than Poland (1.6%), Hungary (1.4%) and Bulgaria (0.35%) in the eastern European region.

Read the full article in Life Insurance International:

VIG’s acquisition from AXA in Romania comes after Life Insurance International published in early July 2016 that AXA is to exit the Serbian market and sell both its life and savings and property and casualty operations in Serbia to VIG.

VIG is a major insurance specialist in Austria, as well as in Central and Eastern Europe.