RIO DE JANEIRO, BRAZIL – SulAmérica announced on Friday, August 23rd, that it sold its automobile and basic insurance branches to German insurance giant Allianz, for R$3 billion (US$750 million), to focus its business in the health, dentistry, life, and pension insurance.
As for Allianz, it will become one of the three leading insurers in Brazil and will take the second position in the auto insurance market, increasing its geographical coverage in the country.
SulAmérica’s auto and basic activities will be separated and will form a new company, which will operate independently and will be transferred to Allianz on completion of the deal.
This new insurer’s net worth is valued at R$700 million, according to Valor Online. The completion of the transaction is conditional upon compliance with some requirements, including prior approval by the relevant regulatory and anti-competitive bodies, and should take up to twelve months.
Focus on personal risks
SulAmérica states that the sale strengthens its strategic positioning focused on insurance against personal risks, i.e., in the health, dentistry, life, and pension segments, in addition to the relevant investment operation.
These areas accounted for approximately 85 percent of the group’s consolidated revenues in the first half of this year. As a result, the company should no longer operate in the asset risk segment in the future. Allianz, on the other hand, says that it is among the three largest global groups of basic insurers.
SulAmérica’s two units, purchased by Allianz, had earnings of approximately R$3.6 million in 2018 — R$ 3.4 billion related to the automobile portfolio and R$202 million to the elementary branch operations.
Nothing changes for customers yet
Until the transaction is effectively completed, the two companies will continue to conduct their business independently.
Therefore, customers, brokers, advisors, suppliers, and employees should not expect any changes in the administration and trade relations, supply, and offer of SulAmérica’s products.