Sompo Expands in Brazil with Acquisition of 54.7% Stake in Maritima

Sompo Japan Insurance Inc. [85258] has acquired a 54.7% stake in Brazil's Maritima Seguros S.A. [87171] in a bid to expand its presence in Brazil.

The transaction totaled 15.5 billion yen (US$163 million) for the acquisition of the Sao Paulo-based nonlife insurer's common and preferred shares by Sompo's local subsidiary Yasuda Seguros S.A. [87984]. Sompo now holds 50% of Maritima's outstanding common shares and 70% of nonvoting preferred shares.

Sompo said it seeks to "further expand its business in Brazil through this investment," supported by Maritima's established brand, retail business and distribution network of brokers and bancassurance.

Established in 1943, Maritima is the 10th largest insurer in Brazil with premium income of 51.9 billion yen and 1,300 employees in 2008, according to Sompo. The Brazilian insurer generated net income of 600 million yen and had total assets of 49.1 billion yen by December 2008.

The acquisition is one of Sompo's biggest investments in overseas markets. The insurer said it is a strategically important move for the group's expansion plan in emerging markets in the Brazil, India, China, Russia and Association of South East Asian Nations countries (BestWire, May 21, 2009).

In Brazil, Sompo said Yasuda has been strong in commercial lines, especially marine insurance. This investment will enhance Sompo's insurance business in the individual lines market.

The Tokyo-based insurance group entered the Brazil market in 1958 with the establishment of Yasuda. Yasuda reported net income of 500 million yen and premium income of 9.2 billion yen in 2008. With 340 employees, the insurer's total assets stood at 16.6 billion yen.

Sompo Japan Insurance Inc. currently has a Best's Financial Strength Rating of A+(Superior).

(By Iris Lai, Hong Kong bureau manager: [email protected])