Eureko, the European insurance and financial services group which owns Friends First, is beginning to implement a two-year plan that will ultimately lead to a listing on the European stock markets.
Mr Joao Talone, Eureko's chief executive, says its primary focus is to expand its presence in Spain, Italy, Central Europe and Ireland before it becomes a public company.
Speaking to The Irish Times Mr Talone, said he was optimistic much of the necessary restructuring could be achieved within 12 months which would clear the way for a flotation before 2002. Eureko, the alliance formed between eight European insurance groups, is the thirteenth largest insurer in Europe but quickly hopes to pass out the likes of Aegon, and Royal & Sun Alliance to take 10th position. This is fundamental to its flotation plans, according to Mr Talone.
The chief executive and his senior management team are currently attempting to complete an acquisition in Spain which will propel it to the number one slot in Iberia. He refused to disclose which group they were in negotiations with but implied that a deal was close to being finalised.
Friends First is the fifth-largest life assurer in the Republic. The business has recently been refocused, with the group selling off its small general insurance arm to CGNU. It plans to concentrate on its core life and pensions business, asset management and finance activities. "We are looking for an acquisition that would add quite a bit of scale to our Irish business. There are some opportunities here and we are concentrating on the life insurance and asset management sectors. We would like to be ranked in the top three in all of the states we operate in and are not lacking in capital to fund this move" Mr Talone says.
Consolidation in the Irish insurance market has largely been driven by mergers and alliances within the UK market, with AXA taking over Guardian/PMPA and the CGNU merger bringing CGU, Norwich Union and Hibernian's businesses together.
Mr Talone suggested future expansion at Friends First could also be driven by outside forces but it was continuing to look for opportunities here.
Eureko is pursuing a novel strategy going forward. Unlike AXA, for example, it does not intend to impose a single new brand name across all of its European operations but will maintain each subsidiary company as an individual entity.
"It will operate like a franchise, with the local brand being retained in each of our markets. Each company will be in an equal position within the group and will be obliged to deliver high standards of performance," he said.
Eureko has assets of €46.8 million and premium income of €7 billion. Last week, two if the members, Achmea of the Netherlands and Banco Commercial Portugues (BCP) of Portugal, announced the merger of their insurance interests with Eureko to form the new group, Eureko NV. The share capital will be owned initially by Achea (72.2 per cent) and BCP (15.1 per cent), with the remaining partners taking a 12.7 per cent stake.
At flotation, 41 per cent of the shares held by Achea will be offered to investors through the Eureko NV holding company, with shares expected to be listed on the London and Amsterdam exchanges. Mr Talone said that decision depended on progress towards consolidation within the European exchanges.
