Sun. Feb 23rd, 2020

Mutua Madrilea acquires 45% of Colombia's Seguros del Estado to continue its expansion through Latin America – La Provincia

Mutua Madrileña and the private company Seguros del EstadoThey have reached an agreement whereby the Spanish group will buy 45% of the Colombian company, which occupies the second position in the ranking of the general insurance market in Colombia. The operation includes the option that Mutua Madrileña expand, from the fourth year, its participation and become control.

The Mutua Madrileña Group, chaired byIgnacio Garralda, take this operation an important step in one of the key projects of your2018-2020 Strategic Plan, as is to continue with the development of its international expansion. The purchase of Seguros del Estado, the second in its history after the acquisition of the Chilean BCI Seguros, allows Mutua Madrileña to open new growth and diversification paths in the international insurance business.

The operation has been approved by the boards of directors of both insurance companies andit is expected that it may materialize in the first months of next year,once the authorizations of the competent bodies and regulatory bodies have been obtained.

HeColombian insurance marketIt has had a strong growth in the last five years and is one of the most developed in real terms in Latin America, especially driven by the branches of Auto and SOAT (Mandatory Traffic Accident Insurance).

In the medium term, the economic prospects of the country are very favorable and accelerated growth is expected to favor, even more, the development of the insurance sector. In this sense, the forecasts point toNon-Life insurance will register a growth of around 7%In the coming years, the largest increase in the sector in Latin America.

Mutual and international expansion

The acquisition of 45% of Seguros del Estado, a company founded in 1956, is part of the geographic diversification strategy of Mutua Madrileña, which includestake advantage of inorganic growth opportunities outside of Spainin order to reinforce the sustainable development of the company, which already has a solid position in our country: leader in the national Non-Life insurance ranking, first in Health and third in the total ranking.

With this second international operation, the Mutua Madrileña Group repeats the success model carried out with the Chilean insurance group BCI, not based on purchases but onstable alliances that allow to jointly face the development of the insurance businessin each country.

According to Ignacio Garralda, president ofMutua Madrileña Group, "the State Insurance purchase operation meets all the criteria we have set for continuing our international expansion, entering a stable market and with high development prospects, in the hands of a local partner with an excellent corporate reputation and with a company that is in the top positions of the insurance sector in Colombia. "

ForJorge Mora, president of Seguros del Estado S.A., "with the entry of Mutua Madrileña in the capital, our company achieves a reference partner with almost 90 years of experience. Together we will seek the consolidation of the insurer in the first positions of the sector ranking and, at the same time, we will continue to reach the most high standards of service and protection for Colombians. "

corporate governance

Once the closing of the operation is completed, Jorge Mora, founder of the company, will maintain the presidency of State Insurance and Mutua Madrileña will appoint two of the 5 directors of the company and will occupy the vice presidency. On the other hand, the Spanish insurer will also designate the Director of Management Control and the Director of Strategic Planning, both present at the company's Steering Committee.

Mirenchu ​​Villa, Deputy General Director of International and Investees of Mutua Madrileña, will assume the Vice Presidency of State Insurance, a responsibility he also occupies inthe Chilean BCI Seguros, a company in which Grupo Mutua holds a 40% stake.

Second Non-Life insurance company in Colombia

Seguros del Estado is the second Non-Life insurer in Colombia, with a11% market shareand a premium volume of 359 million euros at the end of 2018. The State Insurance activity is basically concentrated in the Non-Life business, which represents 91% of the turnover.

The company, present in the branches of Autos, Salud, Caución and Vida, among others, is a leader in Caución and SOAT, the compulsory insurance that all vehicles that circulate in Colombia have to hire and that only covers personal damages in case of accident, excluding any material damage of vehicles. Specific,maintains a 31% market share in this business segment.

The company has 3.5 million insured and 1,550 employees. Its distribution is mainly based on a network of 2,100 brokers, more than 5,000 points of sale and 37 own branches in 24 cities.

Compliance with the strategic plan 2018-2020

The 2018-2020 strategic plan of Grupo Mutua indicated three main lines of action:boost international expansion,the growth of its investment management activity and the entry into new mobility-related businesses, all of them aimed at ensuring sustained development over time and continuing to offer the best service and the best prices in the insurance market.

The Mutua Madrileña Group already hasa portfolio of more than 13 million insuredand premium income of 5,270 million euros. It is a leader in Non-Life insurance in Spain and operates in the modalities of car, motorcycle, legal defense, accident and illness insurance, health care through Adeslas, life, deaths, roadside assistance, home multi-risk and general civil liability. Its investment and pension fund manager, Mutuactivos, is the first independent bank and savings bank manager in the country for managed assets.

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