Generali Sells Colombian Insurance Business to Talanx Group for $35 Million USD

The Generali Group has agreed to sell its Colombian insurance operations to the Talanx Group of Germany for approximately $35 million USD.

In the transaction, the Italian insurance giant will be offloading its stake in both Generali Colombia Seguros Generales S.A. and its subsidiary Generali Colombia Vida Compañia de Seguros S.A. pending regulatory approval. Talanx Group, which is based in Hanover and owns the HDI brand in Latin America, said that it expects the sale to close before 2018.

The deal represents a transfer of a 91.3% holding in Generali Seguros, which has a property insurance focus, and a 93.3% holding of life insurer Generali Vida to the Talanx Group, the Trieste-based company said in a statement.

The sale highlights the differing strategies of the two European companies. While Generali, whose Colombian business had total premium income of around €59 million in 2016, or less than 1% of the local insurance market, no longer sees Latin America as a core segment, Talanx is eager to grow in the region. The German firm already operates in six Latin American nations with its HDI arm.

“For Talanx, the acquisition of Generali Colombia is a strategic step to open up the fifth largest Latin American market,” said Torsten Leue, chairman of the board of management at Talanx International AG. “For us, this means further strengthening our position in the target region. The companies are well positioned and have strong management.”

The Bogotá-based Generali Colombia has been operating since 1952 and has eight branches throughout Colombia. About 70% of the portfolio that Talanx is acquiring is made up of property business with the remaining 30% being on the life side.

“With a young population and a growing middle class, the country is an interesting emerging market, particularly for the retail division,” said Talanx in a statement. “From a fronting perspective, the new companies will also help Talanx underwrite business with the industrial lines division in Colombia.”

For Generali, the small scale of the operations in Colombia meant that it feels the company will be better served by focusing on other markets. “These transactions are another step forward in the rebalancing of Generali Group geographical presence across the world,” said Frédéric de Courtois, CEO of the company’s global business lines and international group. “We are making good progress in the rationalization of our geographical footprint pursuing our strategy to make Generali a simpler and smarter company.”

Along the same lines, Generali has completed its previously announced plan to sell its business in Guatemala. The insurer sold Aseguradora General S.A., a Guatemala City-based firm primarily working in property and casualty lines, to the Neutze family, who the company described as “long-term trusted local partners.”

The Generali Group stated that it will “remain active in Guatemala with its international business lines,” however. The ongoing work will be in relation to Generali Employee Benefits, Generali Global Corporate and Commercial, and Europ Assistance, according to the firm.

Photo: The office of Genearli Colombia in Bogotá. (Credit: Jared Wade)