EY advises on the sale of KIT Finance Insurance to an international strategic investor

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MOSCOW, 16 APRIL 2012 – EY provided lead financial advisory to KIT Finance Holding Company, ultimately owned by JSC "Russian Railways" and NPF "Blagosostoyanie", in the sale of KIT Finance Insurance company, the Russian provider of property and casualty insurance, to Liberty Mutual Insurance Group, one of the largest property and casualty insurers in the world.

The transaction represents the first entry of an international insurer in Russia since 2008, on the back of rapidly growing Russian non-life insurance market. EY has advised the shareholders of KIT Finance Insurance on all aspects of the transaction - from investor search through marketing and rounds of negotiations to deal structuring and successful closing, thus proving EY’s leading financial advisor position. The team was led by Natalia Nikitenko, M&A Associate Director, with extensive support from TAS GFS Leader Avet Mirakyan.

KIT Finance Insurance began operations in mid-2008 as a direct distribution insurer providing primarily automobile and property insurance in St. Petersburg and Moscow. Since then KIT Finance Insurance has become a multi-line, multi-distribution channel company with its own sales force, as well as multiple bancassurance and affinity partnerships. The company has built an innovative and scalable platform enabling considerable potential for further expansion in the market. KIT Finance Insurance wrote nearly $50 million in gross written premium in 2011, with approximately 63 percent coming from automobile insurance, and recently expanded operations into the Russian cities of Novosibirsk, Perm, Orel and Krasnoyarsk.

Davron Rustamkulov, EY Partner, CIS M&A Leader, commented: “KIT Finance Insurance is an attractive platform for expansion into the fast growing Russian insurance market and the transaction brings an opportunity for the company to strengthen its position in the market. For KIT Finance Holding Company and its shareholders the transaction represents a successful divestment of non-core asset to a strategic investor. This is truly a high profile deal, which takes place on the back of difficult financial environment in the world. Entry of a high caliber and sophisticated strategic investor reassures of the long-term prospects of Russian insurance market. For EY Lead Advisory it is a franchise defining deal and great addition to the row of several other recent success stories”.

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