Zurich Insurance Group AG, the largest Swiss insurer, said the sale of its Russian retail unit will lead to an estimated loss of about $300 million.
The insurer said it is selling the business to Moscow-based Olma Group and intends to retain and build its Russian corporate business, according to a statement on its website last Thursday.
“While we invest in priority markets, we either turn around or exit those that are underperforming,” Mike Kerner, chief executive officer of general insurance at Zurich, said in the statement. “When announcing our annual results 2013, we said that the Russian retail business had not developed according to our expectations and that we would explore options for it.”
Aviva Plc, the U.K. insurer, last year sold its Russian unit, following in the footsteps of several European financial institutions that exited the Russian retail market after failing to gain scale. Barclays Plc, HSBC Holdings Plc and Banco Santander SA have all sold their consumer banking operations in Russia over the past three years after being unable to compete with state-controlled lenders.
The sale to Olma, a brokerage and investment-services company, amounts to 1 billion rubles ($30 million), according to Zurich. The business includes about 1.2 million policies representing gross written premiums of 7.1 billion rubles in 2013, Zurich said in the statement.