Cigna, the fifth-biggest insurer by market value, will pay 85 million euros ($104 million) for a 51 percent stake in Finans Elmeklilik, the two companies said today in a statement. The unit will sell Bloomfield, Connecticut-based Cigna’s life insurance and pension products through Istanbul-based Finansbank’s more than 500 retail branches, they said.
Cigna’s international division was its fastest-growing unit last year, boosting sales by 31 percent to $3.11 billion and reaching 30 countries outside the U.S. The Turkish venture adds to a portfolio that sets Cigna apart from its managed-care competitors and may account for a third of profit by 2015, said Ana Gupte, a Sanford C. Bernstein & Co. analyst.
“The move further strengthens our belief in the international segment being one of the primary long-term growth drivers for the company,” Gupte, based in New York, said in a note to clients.
Turkey offers another attractive market, with a growing middle-class and a government urging people to save more for retirement, said Jason Sadler, chief executive officer at Cigna International Health, Life and Accident.
“We are bullish about the prospects in terms of future growth,” Sadler said. “There’s a limited range of products on the market at the moment and that’s why we see such a great opportunity.”
Finansbank, which is owned by the National Bank of Greece SA, has 10 million customers in Turkey, Sadler said in a telephone interview. The deal runs for 15 years and is expected to close by the end of the year, pending Turkish regulatory approval.
Finansbank will receive commissions and a share in proceeds as a continuing partner of the venture, according to the statement, which gave no more financial details. Sadler declined to discussed sales or profit projections.
Cigna fell 1.4 percent to $42.44 at the close in New York.
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