Insurance company Aegon sells its business in Romania. What reasons do company officials invoke?

Dutch insurance company Aegon has put its business in Eastern Europe up for sale, including Romania, in an effort to raise money to better cope with the negative effects of the coronavirus (Covid-19) pandemic and increase its profits by i its main markets, sources told Reuters they wanted to remain anonymous.

In this transaction Aegon is partnering with the US investment bank JPMorgan and has had preliminary discussions with companies in the sector over the sale of the subsidiary, which is mainly focused on Hungary but is also active in Poland, Romania and Turkey, the sources.

They estimate the transaction could be valued at around € 650 million ($ 767.85 million) and could be sold as part of an offer process.

Insurance companies NN Group (Netherlands) and KBC (Belgium) are studying bidding for these assets, while German group Allianz has also expressed interest, sources say

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Representatives from Aegon, Allianz, NN Group and KBC did not comment on the information.

Aegon offers life and general insurance in Hungary, where it has been present since 1992, when it acquired the former state insurance company Allami Biztosito and then used its division as a platform for new acquisitions in Central and Eastern Europe.

Aegon CEO Lard Friese announced in August that a review of the company’s operations in some of the 20 markets in which it operates will follow as part of its capital preservation efforts.

In 2018, the Dutch insurance company sold its businesses in the Czech Republic and Slovakia to NN Group for 155 million euros.