The UNIQA group has agreed with the five shareholders of Credo-Classic, the sixth-largest insurance company in the Ukraine, on the step-by-step takeover of the majority of shares in the company. In a first step, UNIQA will take over 35% of Credo-Classic. At the same time, the successive takeover of additional blocks of shares was fixed contractually, whereby UNIQA will control 51% of the blocks of shares in Credo-Classic in 2008 and its share will increase to 76% by 2009. The total purchase price for the 76% of the share capital of Credo-Classic is similarly oriented as in the case of an “Earn-Out” in the future business successes of the company in the individual phases of the step-by-step acquisition. The immediate establishment of a life insurance company was agreed upon with the current shareholders of Credo-Classic; UNIQA and Credo-Classic will each hold 50% of the shares in the new company. Previously, Credo-Classic was active exclusively in the area of non-life insurance. Immediately with the market entry, UNIQA will be granted essential defined management and control functions. The transactions still require the permission of the responsible authorities. With UNIQA’s involvement, Credo-Classic will become the largest Ukranian insurer with a Western European shareholder.

”With engagement in the Ukraine, one of the largest markets and one of the richest in opportunities in the growth region of Central and Eastern Europe, our activities in this region will reach a new high point. In total, the UNIQA group is thus active in 16 European countries with approximately 320 million inhabitants,” rejoices UNIQA General Director Konstantin Klien about the successful entry with Credo-Classic. Klien: ”The acquisition of one of the best-known insurance companies in Ukraine opens up the opportunity for UNIQA to participate together with a strong and experienced local partner at an early stage in the prospering market development of Ukraine.” With the quick entry into life insurance via the company to be established, Klien sees the greatest development potential in the course of the “preferred partnership” especially in a sales cooperation with the Raiffeisen International subsidiary Aval Bank - the leading retail bank in Ukraine with 1,400 branches and more than 3 million customers. In addition, the expertise of the UNIQA group will be used in order to accelerate business with private customers, which in Ukraine is only beginning.

Credo-Classic
Credo-Classic was established in 1994, and according to preliminary data for 2005, has achieved a premium volume of EUR 28.3 million (+32.2%).

Although the private customer share lies significantly above the market average, large customers still dominate – which corresponds to the market situation in Ukraine. Previously, the company headquartered in Kiev concentrated on the branches of non-life insurance and will now actively become involved in life insurance together with UNIQA. The area-wide sales network with 21 locations forms an outstanding basis for the further expansion of business with private customers. In addition to their own sales force, Credo-Classic also cooperates with numerous brokers and agencies. In the growth field of automobile insurance, the good positioning through partnerships with car dealerships and automobile clubs will be reinforced. Currently the company employs approximately 430 people -- approximately half of whom work as field staff.

Insurance market Ukraine
The insurance market in Ukraine, with its approximately 47 million inhabitants, is characterised by an extremely high number of companies and is currently undergoing a transformation process. Until recently, the insurance market was characterised by company customer business with special finance-like business models, which experts estimate at approximately 70% of the total premium volume. As a result of the authorities’ efforts to reorganise the legal substructures, these “finance insurance companies” and the insurance companies which have concerned themselves primarily with them have recently shown significant premium decreases. According to preliminary data, in 2005, the nearly 400 (!) insurance companies achieved a premium volume of approximately EUR 2.8 billion – only a little more than 2% of this comes from life insurance. The ten largest insurance companies have a total market share of just over 12%.

The greatest growth potential is anticipated for the next few years in mandatory automobile insurance, which has only been obligatory since 2004, and the still-underdeveloped field of life insurance.