Zurich Insurance Group will pay $409 million for the Latin American operations of Australian insurer QBE, a deal that will help it become the top insurer in Argentina and build market share in other neighboring countries.
Plans call for completing the acquisition by the end of 2018, pending regulatory approvals. Zurich said it will fund the deal “from internal resources.”
In pursuing this acquisition, Zurich has its eye largely on Argentina. The South American nation represents about 50 percent of the acquired operations. Zurich said the acquisition will nearly double its P/C business in the country, complement its existing operations and add new distribution/product options, particularly for small and medium commercial customers.
Zurich is bullish about what it is gaining from QBE’s Argentina operations, noting the transaction will help it create “the leading insurance franchise” in Argentina in property/casualty and life insurance, giving it an 8.4 percent market share. It also expects to become the third biggest stand-alone P/C business with a similar market share.
“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,” Claudia Dill, Zurich’s chief executive officer for Latin America, said in prepared remarks. “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 reach their full potential.”
Beyond Argentina, Zurich said it will add both “incremental scale and capabilities in Brazil, Colombia and Mexico.” Also, Zurich becomes the number three insurer in Ecuador once the acquisition closes.