M&A Snapshot: The Quiñenco-Chubb deal in Chile

Bnamericas Published: Tuesday, September 17, 2019

Chile has registered its second major M&A deal in the country’s insurance market since June.

The latest involves the controller of commercial lender Banco de Chile, Quiñenco, selling its insurance business to Swiss giant Chubb.

The Quiñenco group, which also operates in the gas station, maritime transport, food and drink and manufacturing sectors and is controlled by Chile's Luksic family, has a 51.2% stake in Banco de Chile.

Quiñenco subsidiary Inmobiliaria Norte Verde is selling to Chubb INA International Holdings Agencia en Chile and Chubb unit AFIA Finance Corporation Agencia en Chile, the 66.3% stake it holds across Inversiones Vita, life insurer Banchile Seguros de Vida and P&C insurer Segchile Seguros Generales. 

Chubb also purchases the remaining 33.7% from Inversiones Camino del Inca and Inmobiliaria Insera, companies not related to Quiñenco, a regulatory filing with financial services watchdog CMF said.

Under the deal, which is due to close on December 30, Chubb will pay Norte Verde 1.334mn UF (inflation-linked units, about US$53.7mn). 

Quiñenco will make an estimated pre-tax profit of 19.0bn pesos (US$26.5mn).

Earlier this year Chubb reached an agreement with Banco de Chile to form a strategic alliance. The alliance will see Banco de Chile's insurance broker Banchile Corredores de Seguros sell Chubb's life and P&C polices through the bank's branches, ATMs, direct marketing and digital channels, Chubb Seguros Chile and Banco de Chile said in separate regulatory filings.

The 15-year agreement gives Chubb exclusive right to the Banco de Chile sales channels and the right to use the Banchile brand. Chubb will pay Banco de Chile about US$220mn for these rights, the companies said at the time. The contract also includes future earn-out payments to Banco de Chile.

ALSO READ: Snapshot: Chile’s P&C insurance market

ALSO READ: Chubb completes merger of Chilean P&C units

Meanwhile, this month the Chilean unit of Brazilian investment bank BTG Pactual announced it had agreed to sell its life insurance unit – BTG Pactual Compañía de Seguros de Vida – to DT Rigel for 1.80mn UF. DT Rigel, part of local group Dercorp, owns life insurer Rigel Seguros de Vida.

At a glance: Segchile 

Inversiones Vita controls 100% of SegChile, Chile’s second smallest P&C insurer. Seg Chile offers travel, personal accident and health insurance.

Total direct premiums in Chile’s P&C market for January-June was 48.8mn UF.

SegChile direct premiums for January-June: 25,503 UF

SegChile direct claims: 4,053 UF

SegChile income from underwriting: A loss of 982 UF

SegChile income from investments: 2,758 UF

SegChile bottom line: 876 UF

At a glance: BanChile  

Inversiones Vita controls 99.7% of BanChile, among Chile’s mid-sized life insurers. 

Total direct premiums in Chile’s life market for January-June was 114mn UF.

BanChile direct premiums for January-June: 3.16mn UF

BanChile direct claims: 729,114 UF

BanChile income from underwriting: 244,652 UF

BanChile income from investments: 110,782 UF

BanChile bottom line: 264,724 UF

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