Srbijagas and Sogaz to form joint insurance company

- Russian insurance company Sogaz, owned by Gazprom, and public company Srbijagas are going to form joint insurance company in Serbia - the President of the Administrative Board of Sogaz, Vadim Janov, said today (January 26, 2010).

He said to the press in Moscow that 51% of Sogaz Serbia would be owned by the Russian company, while 49% of stocks of the new company would be in the possession of Srbijagas, and added that the company should be put in operation in the second quarter of 2010.

Janov said that all necessary negotiations had been completed with the National Bank of Serbia (NBS) and the authorized institutions that had backed the formation of new insurance company whose registration would be finished within the next two months.

- The plan for the first quarter is that total investments in Serbia amount to 7.5 - 8m EUR, while the investment by Russian company will be proportional to its share in the company - he said and added that the founding capital would amount to 5m EUR.

Janov said that Sogaz had decided to form new insurance company and not to buy one of the existing companies in Serbian market in order not to waste time on restructuring.

Janov specified that, according to the plans, Sogaz Serbia would be focused on the operations with enterprises during the first three years, primarily with those with Russian capital.

- Such companies are the Petroleum Industry of Serbia (NIS), Jugorosgaz, Underground gas storage Banatski Dvor and the companies that will be engaged in realization of the Južni Tok project - said he.

- It is expected that the annual scope of incomes in three years will amount to about 20m EUR - said Janov and specified that the expected income in 2010 was 6.5m EUR, 14.9m EUR in 2011, and 19.8m EUR in 2012.

- The company will be run by Russian experts, while the experts from Serbian market will be hired as well - said Janov and added that the strategy and the personnel policy would be determined in agreement with Srbijagas.

- Following the analysis of the prospects of the opening of a daughter-company in Serbia, the possibility of Serbia's admission to European Union and membership in the World Trade Organization has been taken in consideration. In that case, Sogaz group will get free entrance to the markets of other European countries through the Serbian company - said he.

Janov said that Sogaz in Serbia would be developing property insurance, liability insurance and voluntary medical insurance during the first three years of operations.

He also said that the primary production capacities would be insured first, including oil bases, warehouses, buildings and facilities, transportation means, special technology and freight.

He specified that Srbijagas' interest was in connection with the need for quality protection from risk.

- Of course, Srbijagas also counts on profit from that project - said Janov.

The joint insurance company, as he said, intended to start the operations with the popularion in the second phase of the business.

According to Janov, in case of success, insurance company Sogaz Serbia can become one of the five largest in Serbian market in spite of the fact that multinational companies such as Delta Generali are present in Serbia. It is stated on the official website of company Sogaz that it was founded in 1993, that it obtained BB rating from agency Standard&Poor, while agency Fitch gave it BB rating with positive prospects.