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AMSTERDAM, Netherlands -- Eureko B.V., an alliance of six European financial services companies, is selling its North American operations to focus on European business.
The alliance is selling units in Canada and the United States for more than $200 million.
Eureko's decision to exit North America was spurred by the changing strategies of its German and Nordic members, which are intent on following independent expansion strategies in the U.S. and Canadian markets, said Lars Rosen, chief executive officer of Lansforsakringar Wasa, one of Eureko's insurer members.
The alliance's decision was swayed by increasing competition in Canada and the United States. Eureko faced the choice of growing to gain critical mass or withdrawing.
Eureko, formed in 1992 by an arrangement where each of six insurers kept exclusive access to their home markets but collaborated internationally, now is looking to exploit cross-border opportunities and to develop its interests in Europe more fully.
"We are looking at refocusing our business in Europe, and we are also interested in growing our business in Russia, Central and Eastern Europe," said Eureko's managing director in Amsterdam, Jeff Medlock.
Eureko consists of: Amsterdam-based multiline insurer Achmea Holding N.V.; Surrey, England-based Friends Provident Life Office; Hamburg, Germany-based Parion Finanzholding A.G.; Lisbon, Portugal, financial services conglomerate Banco Comercial Portugues; Copenhagen, Denmark-based Topdanmark A/S; and Stockholm-based Lansforsakringar Wasa.
"Wasa and Topdanmark were eager to work through Eureko to improve our business in North America," said Wasa's Mr. Rosen. "The goals set have not been met, and it became a case of expand at great cost or pull out. The operations in North America and the profitability of Eureko's activities there could not justify further exposure there," he said.
Kari Sundstrom, head of Nordic insurance markets with the Helsinki, Finland-based investment bank Lochlann Suomi, noted that North America is a very competitive environment. "The major Nordic insurers, Skandia and Storebrand, have been active in the North American markets since the 1980s, and neither has made any real impact in terms of market share and return on investment," said Ms. Sundstrom.
Eureko sealed its departure from North America last month with its sale of Seaboard North American Holdings Inc., a Canadian holding company with U.S. and Canadian insurance units, for about $200 million. Seaboard Life Insurance Co. of Canada will merge into North West Life Assurance Co. of Canada, a unit of Industrial-Alliance Life Insurance Co. Seaboard Life had 1997 assets totaling $1.5 billion Canadian ($1.05 billion) and premium income of $275 million Canadian ($192.3 million).
Also last month, The Centris Group Inc. of Costa Mesa, Calif., bought two U.S. units of Seaboard North American Holdings, Indianapolis-based stop-loss insurer Vasa North America Inc. and Seaboard Life Insurance Co. (USA), for about $35 million.
Eureko already is hoping to announce a venture with a seventh European partner, Swiss Mobiliare, in October.
Eureko had expressed an interest in acquiring France's Groupe des Assurances Nationales (BI, Aug. 4, 1997), but its bid was unsuccessful.