Zurich has said that the deal, which is subject to regulatory approvals, will cost a total aggregate price of US$409 million, subject to closing adjustments, and will also increase Zurich’s capabilities in Brazil, Colombia, Mexico and Ecuador.
“This transaction positions us as the leading insurer in Argentina, a market that is demonstrating strong growth, a stable economy and a positive environment for insurance. It deepens our capabilities in the retail and commercial businesses and supports our strategy to become the preferred retail and commercial insurer in the region, protecting our customers and helping them to reach their full potential,” said Claudia Dill, Zurich’s CEO for Latin America. “We welcome our new customers, distributors and colleagues to Zurich.”
The acquired operations had combined gross written premiums of about US$790 million in 2017, Zurich said.
Around 50 per cent of the operations acquired are in Argentina, and Zurich said that that this addition will approximately double Zurich’s property and casualty (P&C) business in Argentina, leading to an overall market share of 8.4 per cent.
The acquisition is expected to be completed by the end of 2018, and Zurich has said that it predicts that it will achieve an overall return on investment comfortably in excess of its indicated hurdle rate of 10 per cent within the first full year post completion of the transaction.