Fortis, the rapidly growing Belgian-Dutch financial conglomerate, took a logical expansionary step with its agreement to acquire American Bankers Insurance Group, analysts said.

Fortis would be able to combine the Miami-based credit insurance company with another it already owns, American Security Group of Atlanta.

Observers also predicted that other big European companies will look to strike deals in insurance and banking, both in their home countries and abroad.

"Much of this is technology-driven," Lewis Phillips, an insurance analyst at Fox-Pitt, Kelton in London, said in the wake of Fortis' announcement Monday of its $2.6 billion deal with American Bankers Insurance.

"You need scale and volume to be able to afford the investments and so you either get bigger or you get out," Mr. Phillips said.

Best known for outdueling ABN Amro of Amsterdam last year in a bitter battle to acquire Generale Bank of Belgium, Fortis is one of several cash- rich European financial conglomerates that are combining bank and insurance operations into what is known on the continent as "bancassurance."

Fortis is "probably one of the most successful bancassurance companies in Europe," Mr. Philips said.

(Separately, Generale Bank has filed an application with the Federal Reserve Bank of New York to give up its banking license there. The bank wants to close its New York branch by June and set up two U.S. finance subsidiaries instead.)

Analysts said it is far easier for European companies to move into the United States than for U.S. insurance companies to enter Europe's more fragmented markets.

"A big Dutch company can get a fair-sized business in the U.S.," said Tim Dawson, a banking analyst with Credit Suisse First Boston in London. "Going the other way, the arithmetic doesn't work so well."

Other European conglomerates such as ING Group of the Netherlands, Credit Suisse of Switzerland, France's Axa, and Germany's Allianz are now likely to increase their stakes in the U.S. insurance business, analysts said. ING has already indicated that it might pay as much as $5 billion to expand in the U.S. insurance sector.

"A lot of European groups have built up enormous amounts of excess capital over the last three to four years as their own paper as well as the value of their equity holdings have risen," Mr. Dawson said. "They also have an internationally minded management that increasingly sees a correlation between size and profitability in specific market segments."

The U.S. credit insurance business holds much appeal for Fortis, said Allen R. Freedman, chairman and chief executive officer of Fortis Inc., the group's U.S. holding company.

The policies, which are marketed by banks, credit card companies, and others, pay off in the event that a borrower cannot meet loan obligations because of death, unemployment, or disability.

The U.S. credit insurance market totals about $12.7 billion in annual premiums, said Mr. Phillips of Fox-Pitt Kelton. The acquisition of American Bankers would give Fortis about $3.6 billion, or a 28% share.

In a teleconference with reporters, Mr. Freedman said American Bankers would provide access to a wider variety of lending channels, such as regional banks, consumer finance companies, and retailers. Through those channels, Fortis could cross-sell traditional insurance products that it underwrites.

Mr. Freedman said another appealing aspect of credit insurance is that an underwriter need not worry about building a brand. That is because unlike life insurance and annuities, credit insurance is sold only by financial intermediaries that attach their own brand image to the sale.

"We have a marketplace of sophisticated buyers-financial intermediaries- and that doesn't require a brand," he said. "We can concentrate on good quality service and innovative products," he added, rather than worrying about the expense of ads on the Super Bowl.

According to the international research firm Datamonitor, banks sell about $334 in credit insurance per million dollars in deposits, almost double what they sell in life, health, and disability insurance.

Though banks have offered the product for decades, the growth prospects are solid, thanks largely to the rise in credit card and mortgage debt.

"There is an increasing concern among consumers about burdening their relatives with debt," said David Kaytes, an analyst with First Manhattan Consulting Group. "And many view it as a cheap form of life insurance."

About 65% of all purchasers of credit insurance don't have other forms of insurance, according to information provided by Fortis.

In addition, the profit margins of credit insurance are significantly higher than most other forms of insurance. With traditional life insurance, the loss ratio-the percentage of premium dollar that is paid out to customers in the form of benefits, can be as high as 90%, Mr. Kaytes says. But with credit insurance, only about 50% to 55% is paid out to customers,the rest being retained by financial intermediaries and the underwriters.

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