Unibanco AIG raising stake in reinsurance monopoly to 10.7%

Brazilian insurance group Unibanco AIG Seguros will pay 60mn reais (US$25mn) to increase its ownership in federal reinsurance monopoly IRB-Brasil Re to 10.7% from 5.6%, the insurer's president Segundo José Rudge told local daily Valor Econômico. Unibanco AIG Seguros bought an additional 4.1% stake from Brazil's second largest insurance group SulAmérica and is negotiating the purchase of a further 1% from another insurer, which Rudge declined to name. By raising its stake in IRB, Unibanco AIG Seguros will be in a position to name a representative to the board and have a say in the selection of reinsurance brokers, Rudge said. Unibanco AIG Seguros is a joint venture between US insurance giant AIG (NYSE: AIG) and the country's number three private sector bank Unibanco (NYSE: UBB). IRB has a monopoly on all reinsurance contracts in Brazil and spreads its risk through different international brokers. The government of President Luiz Inácio Lula da Silva recently ordered a full probe into alleged irregularities at the reinsurance giant.