Sompo offloads health unit in Brazil to SulAmerica to focus on core segments

Japanese re/insurance group  Sompo Holdings will sell the health insurance operations of its Brazilian unit to Brazilian insurer Sul America for R$230 million ($41 million).

SulAmerica will take some 116k beneficiaries chiefly around São Paolo for an estimated R$650 million in annual revenues, as it "reaffirms the strategy of growth in the Health and Dentistry segment," SulAmerica said in its market filing. Unspecified operational synergies are said likely.

Sompo's Brazilian unit will proceed to "focus on growth of the general insurance operations."

"With this operation, we will be able to focus our growth plans by gaining market share and promoting business for our insurance broker partners in different regions of the country," said Alfredo Lalia Neto (pictured), CEO of Sompo Seguros in a press release.

The health operations represent a nearly one fourth of Sompo's revenue generation in Brazil, rough calculations between the SulAmerica claim and Sompo's latest estimates indicate.

Sompo remaining Brazilian operations are considered "one of the most strategically important countries" for Sompo, Katsuyuki Tajiri, retail CEO, executive director of Sompo International Holdings, and executive vice president of Sompo Holdings, was quoted saying.

Sompo last said it expected ¥15.5 billion in losses from its Brazilian unit in 2021 after a ¥6.5 billion adjusted loss in H1, Sompo said in its latest corporate presentation. Management blamed a top line decrease on changes in reinsurance strategy and a profit decline chiefly on reversal of deferred tax assets.

The transaction is subject to approval by regulatory authorities.

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