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Mapfre to take full control of BB Mapfre's non-life business

IBR Staff Writer Published 28 June 2018

Spanish insurance company Mapfre has agreed to buy remaining interest in its Brazilian non-life and life joint ventures with Banco do Brasil for €546m.

At present, Mapfre holds 50% stake in BB Mapfre’s non-life business and after the completion of the latest deal it will assume 100% control over the JV.

As per the new agreement, the redefinition of the business will be simplified, with an efficient governance structure in place, to jointly manage the business.

It is expected to result in reduced internal costs with significantly improved productivity and business profitability.

As per the acquisition, Mapfre will own businesses coming from both the agency channel and automobile and large risks insurance from bank channel, in addition to the Life business related to products distributed via the agency channel.

BB Mapfre will continue to sell its Life and agriculture insurance via the bank channel, as well as Mortgage Life insurance, as it has been doing so till now.

The transaction is subject to adjustment in line with the meeting of automobile insurance distribution targets in the BB bank channel and the dividends that will be paid to shareholders up to when the transaction is closed.

MAPFRE chairman and CEO Antonio Huertas said: “this new configuration of the agreement will allow us to renew our alliance with Banco do Brasil, enlarge MAPFRE’s business in the country, maintain exclusivity for our products in the Banco do Brasil channel, and organize our local businesses in a much simpler and more efficient manner, this agreement is clear proof of our complete confidence in Brazil’s economic development and our commitment to both the country and our future with our partner.”

Last month, Mapfre opened a new headquarters in London. The company stated that opening this headquarters marks the company’s commitment towards the British market.

The company noted that regardless of the uncertainty surrounding Brexit, London will continue to play a strategic role in international insurance and Mapfre aims to occupy a relevant position in the market.

Image: Mapfre to acquire stake in BB Mapfre in Brazil. Photo: Courtesy of MAPFRE.