Insurance merger to reshape Cyprus market, says Alpha Bank

Alpha Bank S.A. announced on Friday that it has agreed key commercial and legal terms for a strategic combination of insurance activities in Cyprus, aiming to create one of the country’s top three insurance groups across life and non-life segments.

The bank said the agreement involves Universal Life Insurance Public Company Ltd and Altius Insurance Ltd, a move expected to establish a leading position in the accident and health segment of the Cypriot insurance market.

Specifically, Alpha Bank confirmed that it has reached an agreement with the shareholders of Altius for the acquisition of the entire issued share capital of the company.

It also said it has agreed with the majority of the shareholders of Universal on the merger of Universal and Altius into a single combined insurance entity.

Under the same arrangements, a member of the Alpha Bank Group will acquire a majority interest in the combined entity, resulting in Alpha Bank Group holding a majority stake following completion of the transaction.

The bank said that as part of the transaction it will partner with the key shareholder group of Universal, Photos Photiades Group, forming a long-term strategic partnership to jointly pursue insurance growth objectives in Cyprus and beyond.

Alpha Bank added that the management team of Altius remains committed to supporting the partnership’s strategic plan, ensuring continuity and materially reducing execution and integration risk.

Following completion, the combined entity is expected to rank among the top three insurance groups in Cyprus in both life and non-life sectors, further strengthening its leadership in accident and health insurance.

“We are delighted in making this bold step to actively shape the Cypriot insurance market by investing into two entities to create the third largest insurance group,” said Alpha Bank chief executive Vassilis Psaltis.

“We are forming a strategic partnership with the Photos Photiades Group, one of most venerable Cypriot business families, who gives us a valuable base to build a challenger proposition in the Cypriot insurance space, and to further strengthen our ties with the Cypriot business community,” he added.

“By combining Universal’s impeccable brand name and its long-standing leadership in Life and Health insurance with Altius’ strong insurance capabilities and proven bancassurance expertise, we create a winning insurance platform, with strong further growth momentum,” Psaltis said.

“I am very much looking forward to working together with Pavlos Photiades and his team to build the best quality insurance group, supported by the best talent from both Universal and Altius, that will offer a comprehensive range of solutions and an exceptional customer experience,” he said.

“A special reference should also be made to Doukas Palaiologos, an insurance veteran and Altius’ core shareholder who led its transformation,” Psaltis continued. “Doukas has been a longstanding partner of Alpha Bank at various instances over the past twenty years.”

“This dual transaction reaffirms Alpha Bank’s enduring commitment to the Cypriot market, where we aim to support households, businesses, and the wider economy by offering best quality, innovative and reliable banking and insurance solutions,” Psaltis said.

From a financial perspective, Alpha Bank said the transaction is fully aligned with its capital allocation policy and exceeds all disclosed merger and acquisition criteria at group level.

The bank said the deal is expected to deliver a return on capital employed in excess of 20 per cent.

It added that earnings per share are expected to increase by approximately 2 per cent, with Cyprus operations net income growing by more than 20 per cent.

Alpha Bank said the transaction is also expected to generate a return on tangible equity accretion of more than 30 basis points.

Moreover, the capital impact is expected to be limited, with a reduction of 23 basis points on CET1 capital, fully consistent with the group’s capital distribution policy.

The bank said the complementary nature of the combination accelerates the execution of its strategy by enhancing the quality, diversification and resilience of the revenue base through capital-light, fee-based income generation.

It added that the transaction is expected to generate significant synergies through an expanded network of approximately 400 insurance agents and more than 100,000 clients.

Alpha Bank also said this expansion will more than double the group’s cross-selling potential for banking products while unlocking additional asset management income.

The synergies, the bank continued, are expected to be driven by leveraging Altius’ life and non-life capabilities alongside Universal Life’s expertise in life and health insurance across a combined agency network.

The bank also said further development of the bancassurance model will build on Altius’ track record through a close partnership and bancassurance agreement with Alpha Bank Cyprus.

This, it said, will create a high-performing distribution channel aligned with the group’s growing market position in Cyprus.

Alpha Bank described the transaction as an important milestone in building a diversified, resilient and capital-efficient financial services group that creates long-term value for shareholders, customers and the Cypriot economy.

Completion of the transaction is expected in the third quarter of 2026, subject to all necessary regulatory approvals and the fulfilment of customary conditions precedent.

Finally, Alpha Bank said it will keep investors informed of further developments in full compliance with applicable legal and regulatory requirements.