Wiener Stadtische Osiguranje, the Serbian unit of Austrian Vienna Insurance Group (VIG), would consider acquiring an insurance portfolio or another insurance company, if a suitable opportunity comes up, a member of the company's executive board told EMIS.
"Serbia's insurance market is not big and is currently stagnating. Given that mergers are very likely and it is possible that some players withdraw from the market, we could potentially consider a portfolio acquisition. The final decision will be based on the quality and structure of the portfolio and on our business strategy," Zoran Blagojevic said.
The portfolio of Wiener Stadtische Osiguranje, which is the fourth biggest insurer in Serbia with a 10% market share, is equally distributed between life and non-life insurance.
"Voluntary insurance accounts for the bulk of our non-life insurance portfolio and we probably have the lowest rate of vehicle insurance among our competitors. Vehicle insurance, and in particular compulsory third party insurance, is a rather unstable segment, as people choose their insurance providers every year most often on the basis of their price offers. This kind of portfolio does not offer real long-term stability, so a portfolio like that would not be an option for us," the executive explained.
VIG entered the Serbian market in 2003 through a greenfield investment and since then the Serbian unit has made two portfolio acquisitions.
The potential acquisition of a domestic competitor would have to be sanctioned by the parent company, but Blagojevic sees potential for some consolidation on the market.
"There are few local companies, including the market leader which is still controlled by the state, that are potentially interesting for investors. That is an open topic. However, that kind of decision is usually taken on a group level and local management helps with suggestions and technicalities. So, the answer to acquisitions is neither yes nor no. It depends on the current moment and interest of our parent company," Blagojevic said.
VIG, which currently operates in 23 countries, employs 1,100 people in Serbia.