Menu

Reinsurance News

QBE to sell Latin American operations to Zurich

26th February 2018 - Author: Matt Sheehan

QBE Insurance Group Limited has announced plans to sell its Latin American operations to Zurich Insurance Group for a total aggregate price of US $409 million.

QBE logoThe transaction includes operations in Argentina, Brazil, Columbia, Ecuador and Mexico, and will see Zurich become the leading insurer in Argentina and the third largest in Ecuador.

Commenting on the agreement, QBE Chief Executive Officer (CEO) Pat Reagan said: “The decision to exit Latin America is consistent with our focus on simplifying the Group, reducing risk and improving the consistency of our results. Following a detailed review of our Latin American Operations, we determined that QBE was no longer the best strategic owner of these businesses.

QBE plans to retain its interests in Puerto Rico for the time being so that it can continue to service the claims resulting from Hurricane Maria. Puerto Rico will become part of QBE’s North American Operations.

As well as earning QBE $100 million in profit before tax, the sale will have a positive impact on the Group’s Australian Prudential Regulation Authority (APRA) Prescribed Capital Amount (PCA) multiple and S&P capital position. This will be due to lower risk charges and the disposal of around $42 million of goodwill and intangible assets.

The combined gross premiums of the deal’s operations were about $790 million in 2017, and will afford Zurich a highly diversified product offering and strong distribution. Argentina represents around 50% of the transaction, and will approximately double Zurich’s property and casualty (P&C) business in the region, resulting in an 8.4% market share.

Claudia Dill, Zurich’s CEO for Latin America, said: “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.”

Although the transaction will be subject to regulatory approval in each jurisdiction, the deal is expected to be completed by the end of 2018.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Hiscox expects continued rate momentum, eyes growth in 2018

In what was a challenging year for the global reinsurance industry, re/insurer Hiscox saw its Hiscox Re & ILS segment...

Close