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EBRD helps develop Armenian insurance sector

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  • EBRD helps develop Armenian insurance sector

    EBRD helps develop Armenian insurance sector

    Harold Doan and Associates (press release), CA
    Aug 3 2005

    Press Release - European Bank for Reconstruction and Development

    The EBRD is acquiring a 35 per cent stake in Cascade Insurance and
    Reinsurance Company (CIRCO), a leading insurance company in Armenia,
    to help meet the growing demands for insurance in the country. It is
    the Bank's first investment in Armenia's non-banking financial sector.

    The EBRD's AMD88.4 million ($200,000) investment will help financially
    strengthen CIRCO, enabling the company to increase the amount of
    risk it can retain that is not reinsured, and continue broadening
    its product range, particularly for non-life insurance products
    such as motor, cargo and property. The Bank's investment - which
    could increase by up to an additional AMD125 million in the event of
    further capital increases by CIRCO - should also help raise values
    in the insurance industry by promoting international standards of
    best insurance practice.

    Kurt Geiger, EBRD Business Group Director for Financial Institutions,
    said the project is very important because it will help promote
    Armenian financial services to western standards. More and more people
    and companies in Armenia are recognising the benefits of insurance,
    which is fuelling the growth of the market, Mr Geiger said. By
    working with a company committed to Armenia and the development of
    its financial products to western standards, we are helping meet that
    demand, he added.

    Established in 2004, CIRCO offers both commercial and personal
    insurance in the non-life and life sectors. While the EBRD will own
    just over a third of the company, the remaining shares are owned by
    CIRCO's parent company Cascade Capital Holdings, which in turn is
    owned by the Cafesjian Family Foundation, set up in 1996 by Gerard
    L Cafesjian, an American of Armenian descent.

    The EBRD's investment in CIRCO is a significant event for the Armenian
    insurance sector, said Jonathan Stark, Deputy CEO of Cascade Capital
    Holdings. It is also a major step towards Cascade Capital's goal
    to become a financial market leader in Armenia and the Caucasus,
    Mr Stark said.

    The project forms part of the EBRD's strategy to support the expansion
    and development of the non-bank financial institutions sector, and
    particularly insurance, in its countries of operations where this
    sector is under-developed. The Bank is one of the largest investors
    in Armenia, having invested more than ~@100 million in 23 projects.
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