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| ING Russia Life |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 24319 |
| Company name | ING Life Russia |
| Country | Russian Federation |
| Sector | Finance & Insurance |
| Environmental category | C |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | November 29, 2006 |
| Projected board date | January 25, 2007 |
| Previous Events | Invested: August 8, 2008
Signed: June 20, 2007
Approved: February 15, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project consists of an equity investment of up to approximately EUR 22.2 million ($ 28.5 million equivalent) for a 10% stake in ING Life Insurance ZAO, a life insurance company to be newly established in Russia by the ING Group.
EBRD will also hold a 10% equity stake with ING holding the remaining 80%. The company is expected to require equity financing of EUR 222 million over a 10 year period to support its business plan. The life insurance market in Russia is in a nascent stage of development, both in terms of size and sophistication of the industry. Reported life insurance premiums are small relative to population size but the true life insurance market is even smaller due to the inclusion of a high volume of artificial tax motivated arrangements within the official statistics. The proposed project is expected to have a strong development impact by promoting the value of life assurance and the growth of the industry through a highly respected international player which will operate to high standards. IFC has a strong role in this project in supporting the entry of a global insurance major such as ING into an underdeveloped and challenging market. IFC’s support will serve as a signal of its confidence in the long term prospects of this market. |
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| Project sponsor and major shareholders of project company |
ING is a major global financial services company, providing a wide array of banking, insurance and asset management services in over 50 countries. ING has 150 years of insurance expertise and has successfully launched insurance companies in North America, Latin America, Asia and Europe.
As of December 31, 2005, ING Group had total assets of EUR 1,159 billion (ING Group comprises of ING Groep N.V., ING Verzekeringen N.V., ING Bank N.V. and all other subsidiaries). Its reported year end net profit was EUR 7.2 billion as compared with EUR 5.8 billion as of year end 2004. ING’s corporate structure includes six business lines: Insurance Americas, Insurance Europe, Insurance Asia/Pacific, Wholesale Banking, Retail Banking, and ING Direct. Both ING Group N.V. and ING Insurance N.V. are rated Aa3 by Moody’s and AA- by Standard & Poor’s. The corresponding ratings of ING Bank N.V. are AA and Aa2. |
| Total project cost and amount and nature of IFC's investment |
| Total projected project cost is estimated at Euro 222 million. The proposed IFC equity investment (at same economic terms and conditions as ING) is for up to EUR 22.2 million ($ 28.5 million equivalent) for a 10% stake in ING Life Insurance ZAO. |
| Location of project and description of site |
| The project will be initiated in Moscow, Russia and will expand thereon to other major Russian cities. |
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| Anticipated development impact of the project |
| The project comprises an institution-building investment aimed at improving the efficiency of financial intermediation and access to the underserved. The project will promote the availability of critically lacking insurance-related financial products for Russian consumers. It will increase the availability of a greater range of financial planning products to Russian consumers and on a broader level, will provide the critical stimulus for the growth and development of the market. |
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| IFC's expected development contribution |
By supporting this project, IFC will have the following impacts:
- Supporting expansion of a world-class financial institution in the development of a challenging market.
- Increasing transparency of the Russian life insurance industry through promotion of international best practices of financial management and customer service.
- Enhancing credibility of the Russian financial market.
- Finally, IFC through its fostering of this project will demonstrate the viability and potential of life insurance business in Russia and help attract other international players into the market, eventually leading to the creation of a sophisticated and competitive industry. |
| Environmental and social issues - Category C |
| This project being set will be engaged in the business of life insurance, and has been classified as a Category C project according to IFC’s Environmental and Social Review Procedure. No further review is required. The project is required to inform IFC in the event of any change in business that could affect the social and environmental risks of the portfolio and commit to meeting any requirements that may arise with such a change. |
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| For inquiries about the project, contact: |
Mr. Jaroslaw Bartkiewicz
Head of Business Development
Jaroslaw.Bartkiewicz@mail.ing.nl
Mr. Assad Ben Halima
Senior Business Manager
Assad.Ben.Halima@mail.ing.nl
Regional Office Insurance Central Europe
Business Development & Strategy
P.O. Box 1800
1000 BV Amsterdam
ACT A.15.054
Tel: +31 20 576 0845 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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