Allianz has said it will take a €400m hit on its Russia operations, after agreeing to sell a majority stake in the business to the London registered company that owns one of Russia’s major insurance companies.
The German insurer has agreed to sell a 50.1 per cent stake in its Russian business to London registered firm Interholding LLC, the owner of Russian insurer Zetta Insurance.
The deal is set to see Allianz, Europe’s biggest insurer, suffer a €400m financial hit, in line with its plans to scale back Russian operations, in response to Russia’s invasion of Ukraine.
The transaction will however see Allianz hold onto the remaining 49.9 per cent stake in its Russian operations, from which it generated 0.17 per cent of its total revenues in 2021.
An Allianz spokesperson told City A.M. the Munich insurer had decided to hold onto its minority stake to “ensure continuity for our clients and employees in Russia.”
The insurer said the €400m negative impact is “largely due to the reclassification of negative foreign exchange impact from shareholders’ equity,” as the firm said its “solvency capitalization and cash position will not be impacted”.
Allianz’ sell off, for an undisclosed sum, comes as major companies from across the western world continue to cut their links to Russia.
Founded in 1993, Zetta Insurance, one of Russia’s major insurance providers, currently insures more than 1m Russian citizens.
The sale comes after Allianz’s chief financial officer Giulio Terzariol last month told journalists that the firm would likely suffer a €0.4bn- €0.5bn hit to its profits, through its planned exit from Russia.
Allianz’ deal comes after Zurich Insurance last month agreed to sell off its Russian operations to 11 members of its local units team.