Allianz SE makes bid for Brazilian Sul América's auto and P&C portfolio

Brazil-based insurer Sul América (SA) has received an indicative, non-binding offer for its automobile, and property and casualty insurance portfolio from German firm Allianz SE, according to a filing SA made to the Brazilian Securities and Exchange Commission this week.

SA said it was discussing a possible transaction with the German insurer “that could result in a concentration of its operations in the segments of health, dental, life, pension and asset management”.
However, it was keen to emphasise that “there is no definition, conclusion or binding agreement related to those opportunities”.

The Brazilian company runs multiple insurance segments such as health and dental, auto, property and casualty, life and personal accident insurance. It said that although the Brazilian insurance market has been growing in recent years market penetration in the country compared to the rest of the world is still low, according to the March 2018 Sigma report.

Figures from insurance regulator SUSEP (Superintendence of Private Insurance), show that total revenues from written premiums for the property and casualty market in Brazil reached R$76.5 billion (US$20.19 billion) in 2018.

News of the potential deal comes in the same week as Allianz Global Corporate & Specialty (AGCS) confirmed it would stop underwriting long tail risks in Australia and close its operations in New Zealand from September 2019. The insurer said the decision followed a "strategic review" of the business.

The German firm also agreed to sell its 60 percent stake in joint venture Allianz Popular SL to Banco Santander in May 2019 for €936.5 million, and terminate its exclusive non-life insurance distribution agreement with the Spanish bank.

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