Bulgarian market regulator lets two largest insurance brokers unite

The Bulgarian Commission on Protection of Competition (CPC) approved the sale of the largest insurance broker in Bulgaria - SDI. The company will pass into the hands of the Polish Unilink, whose owner is the American financial group Acrisure.

The latter are also the owners of the second largest insurance outfit in Bulgaria - I&G Insurance Brokers. That is why the antimonopoly regulator made a thorough study of the deal, which was submitted for examination at the beginning of September last year.

This means that now the two largest insurance brokers in Bulgaria are united under one hat and can accumulate significant market power. With the new deal, they aim to achieve economies of scale and increase the quality of the offered insurance services in the Bulgarian insurance market.

Some numbers

For the last year taken into account by the CPC – 2022 – SDI had a market share in the insurance premium income of 7.99%. I&G Insurance Brokers was second with 7.62%. The CPC report shows that the top 8 market positions during the analyzed period were occupied by the same companies, although their shares during the period varied.

After the deal’s approval, the two companies will occupy a leading position in the most popular insurance product sold in Bulgaria - the mandatory "Civil Liability". Their combined share will be 25.73%. Before the deal, the leader in that product segment was SDI with 16.8%.

The combined group will also have a significant lead in the Travel Assistance insurance market with a share of 23.13%, compared to SDI's share of 17.57% until now.

What was the opinion of the CPC?

However, the Bulgarian Commission on the Protection of Competition emphasizes that in no segment of the insurance services market will the two companies together exceed 40% and in view of this

there is no indication that the transaction will result in the establishment of a dominant position for the combined enterprise”.

The regulator justified its approval with the statement that the insurance brokers market is not characterized by particular loyalty.

The Commission adds that effective competitive pressure on the united enterprise could be exerted by the two next largest insurance brokers - Marsh EOOD, which will occupy the second position with a market share of 4.14%, and Amarant Bulgaria, which is trying to digitize the process of signing insurance contracts. Marsh is part of the American company Marsh International Holdings Inc, which operates in over 100 countries.

Given the large number of insurance brokers operating on Bulgarian territory at the moment – 342 - and the fragmented structure of the market, the CPC concludes that the

entry barrier to this market is relatively low”.

Expansion

Poland's Unilink has begun a rapid expansion across Central and Eastern Europe in recent years. It first acquired I&G, then continued with the acquisition of Romanian insurance leader Safety Insurance Broker and the main insurance company in the Czech Republic and Slovenia - Insia.

At the beginning of last year, Unilink was acquired by the American fintech Acrisure. That way, the U.S. company entered Central and Eastern Europe and Bulgaria.

In the first days of the current year, it also became clear that it had acquired the Croatian insurance broker Euro Posredovanje.

Translated by Tzvetozar Vincent Iolov