Lithuania beckons for CGNU

BRITISH insurance giant CGNU is blazing a trail into the former Soviet Union. The group is investing £5m in Lithuania to grab a pioneering major stake of the life insurance market.

'With the current growth rate, there will be one million potential clients in Lithuania in 2010 and the total value of contracts could reach $250m (£177m),' said Stephen Marini, general manager of Commercial Union Lietuva.

The company has 100 brokers in Lithuania and plans to expand to 700 in the next three years. The aim is to sign up almost a third of the population in the next decade.

CGNU has a substantial presence in Poland but the recovery of the former Soviet economies since the 1998 crash has led to insurers looking to a major new market - and going further east. The group's announcement about Lithuania follows talks with President Valdas Adamkus on pension fund and social security provision.

Meanwhile, the region is increasingly seen as offering business potential by the insurance industry. British brokerage Willis has recently been involved in arranging insurance for Russia's flag carrier Aeroflot, metals giant Norilsk Nickel and Rosspirtrom, the State alcohol conglomerate.