ZURICH — Zurich Insurance Group is selling its Russian retail business to investment group OLMA, taking a hit of about $300 million in the third quarter for the sale, the Swiss insurer said Thursday.
The sale comes as part of the insurer's strategy to shed underperforming units. Zurich Insurance began a three-year restructuring program at the end of 2013 to invest in high-margin businesses and sell underperforming lines, the cost of which will total $600 million.
It said on Thursday it was selling the Russian retail unit, which had a gross written premium volume of 7.1 billion rubles ($207 million) in 2013, to Russian investment group OLMA for $30 million. Zurich said it would keep and expand its Russian corporate business.
A spokeswoman for Zurich said the retail business had not been profitable for the last two years.
"The transaction is a proof-point of our 2014-2016 strategy. While we invest in priority markets, we either turn around or exit those that are under-performing," Mike Kerner, chief executive of Zurich's General Insurance unit said in a statement on Thursday.
The sale is expected to close in the third quarter of this year, and the loss will only have a small impact on shareholder equity, Zurich said.
Shares in Zurich were trading nearly 1 percent higher by 9:15 am GMT, slightly outperforming the European sector index.
See also:Foreign Investors Gobble Up Shares in Moscow Exchange
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
