RUSSIA LIFE INSURANCE MARKET

EUROPE: MARCH 2008 - Russian insurance industry interests foreign investors.

Mergers and acquisitions activity in the Russian financial services sector has been strong since the beginning of 2006 and this trend is expected to continue through to the middle of 2008 according to a survey conducted by mergermarket for PwC. However, obstacles to concluding deals were found and included the lack of transparency, a lack of suitable targets and competition for the most attractive targets.

46% of respondents believed that the retail banking sector would be the most active whereas only 14% believed that the life insurance sector would be. However, a PwC spokesman was more positive stating that the Russian insurance market, because of its low capitalisation and high growth rate, would remain very attractive for foreign investors.

German, French and Italian companies are expected to have the most interest in acquiring in Russia. Most domestic respondents favour the presence of foreign investors because they provide easier...more