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UPDATE 1-Aksigorta in talks with possible foreign partners

Published 04/20/2010, 05:16 AM
Updated 04/20/2010, 05:48 AM

* Partnership would lift Turkish insurer's market share

* Shares up 4.4 percent

(Adds quote, details, background)

ISTANBUL, April 20 (Reuters) - Turkish insurer Aksigorta said on Tuesday it is in talks with potential foreign partners for a deal that could make it the country's market leader.

U.S. and Asian companies are interested in the Turkish insurance market, Aksigorta said, but did not name the companies it is negotiating with.

"We have started talks with foreign players who see the growth potential in Turkey," Aksigorta said. "A merger could make Aksigorta the sector leader."

Aksigorta is the third-biggest Turkish insurer in non-life premiums, with 10.98 percent of the market.

The insurer's shares jumped as much as 5 percent after the statement. The stock was trading up 4.4 percent at 2.12 lira at 0858 GMT. Sabanci Holding, which owns 62 percent of the insurer, fell 0.75 percent to 6.65 lira.

The Turkish insurance sector could expand by 10 percent this year as the economy returns to growth, the Association of Insurance and Reinsurance Companies (TSRSB) said in March.

This expansion is expected to revive interest from foreign investors in the sector, where penetration is low. Turks spend about 1 percent of gross domestic product (GDP) on insurance, compared with 7 percent in developed nations. The potential for growth may appeal to foreign companies, which have little room to expand in their own markets.

Aksigorta said if talks with potential investors fail to produce a partnership, it will grow organically.

Dutch Group Eureko, Spain's Mapfre , Axa Group of France, Germany's Allianz, France's Groupama and Netherlands-based ING Group have bought seven Turkish insurers since 2007 for a combined $2.43 billion. (Reporting by Asli Kandemir; Writing by Ayla Jean Yackley; Editing by Erica Billingham)

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