Ace Group Acquires Ecuador-Based Rio Guayas Compania for $55 Million

The Ace Group has acquired Rio Guayas Compania de Seguros y Reaseguros for $55 million in cash.

Rio Guayas is an Ecuador-based general insurance company owned by Banco de Guayaquil. Rio Guayas sells a range of insurance products, including motor, property, life, cargo, accident and health, casualty, marine and aviation, primarily through independent brokers and agencies and Banco de Guayaquil's branches. Rio Guayas is Ecuador's fourth largest nonlife insurer, according to Ace.

The acquisition will be accretive to Ace's earnings and book value per share, Ace said in a statement.

"Rio Guayas is very complementary to Ace's existing business in Ecuador and will expand our capabilities considerably in terms of geography, products and distribution," said Jorge Luis Cazar, regional president of Ace's Latin American operations, in a statement. "The addition of Rio Guayas will offer enhanced access to small- and middle-market businesses and individual consumers, will double our premium volume in Ecuador and will position Ace as one of the country's top general insurers."

Ace and its subsidiaries have made several acquisitions in recent months.

In February, Ace Ltd. completed its acquisition of New York Life Insurance Co.'s life operation in South Korea, the first of a two-part transaction, for $75 million in cash (Best's News Service, Feb. 2, 2011).

Then in June, Ace Group subsidiary Ace INA International Holdings Ltd. acquired full ownership of its nonlife joint venture in Malaysia to strengthen its market position in the country.

The multiline insurance group said it paid $39 million cash for all of the outstanding shares it does not already own, or approximately 49%, of Ace Synergy Insurance Bhd. in Malaysia from its partner Advance Synergy Capital Bhd (Best's News Service, June 21, 2011).

Another subsidiary, Ace Life, moved its Asia-Pacific regional office to Hong Kong from Thailand to support the company's growing life insurance operations. The newly opened office will be led by Saloon Tham, regional president of Ace Life Asia Pacific (Best's News Service, Sept. 26, 2011).

Ace Group reported a $31 million loss in third-quarter net income amid signs of favorable shifts in pricing and business volume across certain insurance segments.The loss compares with a $675 million gain for the same period a year earlier (Best's News Service, Oct. 28, 2011).

(By Jeff Jeffrey, Washington Correspondent: jeff.jeffrey@ambest.com)