Two large Slovenian insurance companies are planning a merger that would create a major player on the Slovenian insurance market and a serious competitor for the country's leading insurer, Zavarovalnica Triglav.
Vzajemna, the largest specialised health insurance company, and Adriatic Slovenica, the second-largest general insurer in the country, have launched the relevant proceedings and the merger has been endorsed by both supervisory boards, the two companies said in a joint press release on Wednesday.
The next step is an appraisal of the value of both insurers, which will serve as a basis for determining the swap ratio. Since Vzajemna is a mutual insurance company, its customers will get stakes in the merged company.
The parties to the merger talks expect considerable synergies, including the development of premium services in health and property insurance and tighter cooperation with health care providers.
Vzajemna and Adriatic Slovenica expect several million euros in synergies from the streamlining of back-office tasks and IT.
The merged company is projected to collect gross annual premiums of SIT 110bn (EUR 460m).
Adriatic Slovenica is a subsidiary of asset management firm KD Group. It was established in mid-2005 with the merger of Adriatic and Slovenica.
In 2005 it held a 23% market share, with premiums worth SIT 48bn (EUR 200.3m) and a profit of SIT 1bn (EUR 4.17m).
Vzajemna is by far the country's largest health insurer, boasting a market share of 63% in 2005. It finished 2005 with a loss of SIT 2.6bn (EUR 10.8m).
The insurer wanted to re-incorporate as a joint-stock company but parliament halted the procedure in January this year for fear that its customers might lose out.
In its effort to demutualise, Vzajemna became embroiled in a battle with the Agency for Insurance Supervision which even revoked the licence of CEO Marko Jaklic. That decision was subsequently overturned by the Supreme Court.
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