Yapi Kredi Sigorta AS, a Turkish insurer, surged the most in nine months on a report that Zurich Insurance Co. Ltd. offered to buy it.
Yapi Kredi Sigorta rose as much as 11 percent and gained 6.8 percent to 13.40 liras at the close in Istanbul, climbing the most since April. Yapi & Kredi Bankasi AS, which owns the insurer, jumped 5.2 percent to 3.05 liras.
Zurich Insurance made the offer to buy Yapi Kredi Sigorta last week, Haberturk newspaper reported today, without saying where it got the information. Yapi Kredi bank, the joint venture between UniCredit SpA of Italy and Turkey’s Koc Holding AS, denied there was any sale process underway in a filing with the stock exchange.
Insurers including Axa SA, Allianz SE and Aviva Plc have bought stakes in Turkish insurers, seeking to grow in an industry where premiums for non-life insurance account for about 1 percent of gross domestic product, less than one-third of European Union averages. Metlife was the latest foreign company to buy a stake in Turkey, acquiring the life insurance unit of Dexia SA for 162 million euros ($208 million) in October.
An acquisition value for the non-life and pension units might be $1.4 billion to $1.7 billion and boost Yapi Kredi bank’s capital adequacy ratio by as much as 160 basis points, according to a report by Istanbul-based Tera Brokers today. Previous deals in the non-life insurance sector in Turkey have been made for around $110 million per 1 percent market share, Tera said. Yapi Kredi Sigorta has a 6.9 percent market share in the non-life segment, Tera said.
Yapi Kredi Sigorta has a market value of 1 billion liras ($546 million), based on its share price yesterday. The insurer had net income of 18.4 million liras in the third quarter, almost double the year-earlier figure. The company had premiums of 973 million liras last year, it informed the Istanbul Stock Exchange on Jan. 12.