Zurich acquires QBE operations in Latin America

Zurich Insurance Group reached an agreement to acquire the operations of Australia's QBE Insurance Group Limited in Latin America in a deal worth US$409mn.

The transaction, which is subject to regulatory approvals, will position Zurich as the leading insurer in Argentina, and also will generate incremental scale in Brazil, Colombia, Mexico and Ecuador.

"This transaction positions us as the leading insurer in Argentina, a market that is demonstrating strong growth, a stable economy and a positive environment for insurance," said Claudia Dill, Zurich's Chief Executive Officer for Latin America.

The acquired operations had combined gross written premiums of about US$790mn in 2017, with a highly diversified product offering and strong distribution. Argentina represents around 50% of the acquired operations. It will double Zurich's property and casualty (P&C) business in Argentina.

In Brazil, Colombia and Mexico, Zurich is expected to gain a range of incremental capabilities and access to additional distribution channels, and in Ecuador the acquired business ranks third in the country.

The acquisition is expected to be completed by the end of 2018 and funded from Zurich's internal resources.

"The decision to exit Latin America is consistent with our focus on simplifying the group, reducing risk and improving the consistency of our results," said Pat Regan, QBE Group CEO, in a separate statement.

QBE Puerto Rico will be retained by QBE to facilitate the servicing of claims resulting from Hurricane María and will become part of QBE's North American Operations, it added.

The companies did not unveil their respective financial advisers in the transaction.