Generali revamps in eastern Europe

PRAGUE, Czech Republic—Italy's Assicurazioni Generali S.p.A. is reorganizing its central and eastern European operations through a joint venture with PPF Group N.V., which owns Ceska Pojistovna A.S., the largest life and nonlife insurance group in the Czech Republic.

The Prague, Czech Republic-based joint venture, announced last week, will unite all of Generali's and PPF Group's insurance assets in the central and eastern European region.

Previously, Generali's holdings in the region were managed by Generali Holding Vienna.

Fitch Ratings Ltd. in London said Friday that Generali's "relatively disparate eastern European operations would be enhanced by the inclusion of Ceska Pojistovna." Fitch affirmed Generali's insurer financial strength rating at AA.

Under the deal, Trieste, Italy-based Generali will pay PPF Group e1.1 billion ($1.5 billion) in cash for a 51% share of the joint venture.

PPF is a finance group incorporated in the Netherlands with headquarters in Prague.

In a joint statement, Generali and PPF said the joint venture will form the largest central and eastern European insurance group based on gross premiums written.

Based on pro-forma 2006 data, the joint venture's annual gross written premiums will be greater than e2.6 billion ($3.5 billion), with an embedded value of e2.3 billion ($3.1 billion) and more than 9 million customers in 12 countries.

The combined group will have operations in the Czech Republic, the Slovak Republic, Poland, Hungary, Romania, Bulgaria, Ukraine, Russia, Serbia, Slovenia, Croatia and Kazakhstan.