ERGO Italia

Life and non-life insurance products
June 2016
Financial Services
ERGO Italia

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ERGO Italia is a Milan-based provider of life and non-life insurance products.

The Group was founded in 1986. It distributes savings and personal line products through a network of 160 agencies and approximately 2,000 distributors across Italy.

The Group's life business, manages approximately 600,000 life policies with €5.1 billion of gross reserves and a net income of €38 million.  Its non-life business, manages more than 350,000 policies, with approximately €195 million of gross reserves.

Cinven agreed to acquire the business in November 2015 from German insurer ERGO Group.

Cinven's goal is for ERGO Italia to lead the Italian insurance market's consolidation and to become a market leader in Italy by acquiring scale, products and access to customers.

Cinven's strategy is to rapidly increase the size of ERGO Italia's insurance business through a consolidation of the market, which is dominated by small and medium sized players that do not benefit from the sector's inherent economies of scale, as well as international players that are seeking to scale back their Italian operations. In addition, there is an opportunity to invest in process efficiencies, improvements in customer service and expansion of the Group's distribution channels.

The Italian life insurance market is the fourth largest in Europe, with approximately €530 billion of gross reserves. In addition, it has among the fastest growth rates in Europe, at around 28% per annum over the past two years, driven by the Bancassurance distribution channel.

The investment builds on Cinven's outstanding track record of investing in, growing and consolidating life insurance companies in Europe - including Partnership Assurance and Guardian Financial Services in the UK, and Heidelberger Leben Group in Germany. ERGO Italia represents Cinven's ninth transaction in the European life insurance sector, including primary investments and bolt-on acquisitions.

In addition, Cinven has a successful track record of investing in the Italian market, through its investment in Avio, a leading aerospace business, which has experienced strong organic growth during Cinven's period of ownership.