Zurich buys QBE’s Latam business

Zurich Insurance has announced that it was buying QBE Insurance Group’s Latin American business for USD409 million.

The acquired business had gross premiums of USD790 million last year, with Argentina representing about half and the rest divided among Ecuador, Mexico, Brazil and Colombia, Zurich said in a statement recently.

“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,” Claudia Dill, Zurich’s chief executive officer for Latin America, said in the statement.

Zurich said it expected to achieve an overall return on investment comfortably in excess of 10 percent within the first full year post completion of the transaction, which is expected by the end of 2018. Funding is to come from internal resources, Zurich said. In a separate statement, QBE said it expected a pre-tax profit from the sale of about USD100 million.

“The decision to exit Latin America is consistent with our focus on simplifying the group, reducing risk and improving the consistency of our results,” QBE Chief Executive Pat Regan said.