KBC headquarters, Antwerp, Belgium Courtesy of Wikimedia Commons

German insurer Talanx has agreed to buy Belgian KBC Group's Polish insurance unit TUiR Warta for €770 million.

The transaction is expected to be finalized in the second half of 2012, following regulatory approval.

Once the transaction is completed Talanx will be the second-largest insurance group in Poland, according to Financial Supervision Authority data.

Herbert Haas, CEO of Talanx Group, said in a statement, “We plan to invest further in the business, maintaining each of the subsidiaries and further improving the service and product offering to the clients.”

Jan Vanhevel, KBC Group CEO said: “Even in an extremely challenging macroeconomic environment and in very volatile market circumstances, we have succeeded in ... obtaining an attractive price.”

KBC was given €7 billion in state aid from the Belgian government during the financial crisis and has agreed with the European Commission to divest assets in order to pay the money back. To this end, it is selling Polish lender Kredyt Bank as well as Warta.

For the first three quarters of 2011, Warta recorded a net profit of zł.164 million. The insurer has around 1.5 million clients on its books and has an especially strong market position in marine and aviation insurance.

Talanx, Germany's third-largest insurance firm, is not new to the Polish market, having been operating in the country through HDI Asekuracja TU and HDI-Gerling Zycie TU, which work in the motor, general liability, property and life insurance markets.