HDI International strengthens its position in core market Brazil

“In a consolidating market, scale and diversification become more and more important. This acquisition enables us to continue our success story in Brazil which is the largest insurance market in Latin America with significant profitable growth potential in the mid- and long-term,” commented Dr Wilm Langenbach, Board Member of Talanx AG responsible for the international retail business and CEO of HDI International AG. HDI Seguros S.A. in Brazil will grow by around BRL 1.8 billion (EUR 280 million) to approximately BRL 5.5 billion (EUR 860 million) in gross written premiums. Nicolas Masjuan, Head of LATAM at HDI International AG adds that “the acquisition in our core market Brazil strengthens our market position in some key regions in Brazil, especially in São Paulo, the country’s largest city, and diversifies our portfolio into Life Protection as well as gaining scale in Residential & Property. Furthermore, we are able to achieve significant synergies by combining Sompo´s retail business with our existing business in Brazil.”

The initial purchase price payment is subject to certain closing account and other adjustments and expected to amount to approximately BRL 1,050 million. It may be adjusted up or down based on certain performance-based criteria post closing. From the financial year 2023 onwards, the transaction is expected to be earnings accretive.

Sompo Seguros S.A. is part of the Sompo Holdings Group founded in 1943. The company operates in retail insurance and industrial lines. As part of a strategic reorientation on the industrial lines segment in Brazil, Sompo Seguros S.A. will spin off the retail business into a new company and transfer the new company to HDI. The retail business currently comprises 22 branch offices located throughout Brazil, with a relevant concentration in São Paulo. The former retail business of Sompo Seguros ranks among the country’s top 10 motor insurers. Following a transitional period, the business will be continued under HDI’s brand.

HDI International AG already has a presence in Brazil through HDI Seguros S.A. with a focus on the motor insurance market. With its workforce of more than 1,300 employees, the company generated a premium volume in 2021 of around BRL 3.7 billion (EUR 580 million). The Talanx Industrial Lines division also operates in Brazil through HDI Global Seguros S.A. The combined entities of Talanx would bring the group close to a TOP5 position in the Brazilian P&C market.

Talanx intends to finance the transaction from existing liquid funds. This transaction is subject to the approval of the responsible supervisory authorities. The closing of this transaction is expected mid 2023.