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16/09/2022 | Fonte: Valor Econômico

CNP buys stakes in Icatu and Caixa Seguridade for R$ 907 million

French group has invested almost R$9 billion since 2020 to grow in Brazil, a country that represents 20% of the group’s global revenues

CNP Assurances sees Brazil in a strategic way and evaluates the local insurance market as one of those with the highest growth potential in the world. A sign of the size of the French group’s bet in the country is the investment made since 2020: almost R$ 9 billion, most of which has already been disbursed. The most recent French move came in the form of the acquisition of all of Caixa Seguridade’s shares in the companies for the exploitation of the federal bank’s channels in the distribution of insurance and consortia.

To get 100% of the joint ventures it signed with Caixa two years ago, CNP will pay R$667.18 million, according to an announcement made on Tuesday by the Brazilian institution. But the purchase of the bank’s shares in the joint ventures CNP Consórcio, CNP Capitalização, Previsul and Odonto Empresas, represents only part of the movement.

The group has also reached an agreement to acquire Icatu’s share in the partnership that explores the banking channel in the capitalization mode. For this, it will disburse another R$240 million. In total, the new acquisitions add up to R$ 907 million, according to CNP.

They do not mean, however, the end of the partnership with Caixa. Much of the bond between the houses was renewed in 2021, when the French conglomerate paid R$ 7 billion to maintain exclusivity in the distribution of life insurance products, credit life and private pension in the bank’s branch for another 25 years.

In parallel, it won the auction to explore the agency channel for consortiums for 20 years. The contract signed almost two years ago also provides for an additional amount that may reach R$800 million, to be paid depending on the fulfillment of performance metrics defined in the agreement.

Together with the more than R$ 900 million in acquisitions this year, the total investment in the Brazilian market already amounts to R$ 8.7 billion. “CNP constantly evaluates the growth opportunities in the world and has reached the conclusion that the greatest growth potential is Latin America, and the priority is Brazil”, says CNP’s CEO in Brazil, Asma Baccar, in an interview to Valor.

According to the executive, the country represents 20% of the global group’s revenues. “The trend, looking into the future, is that this participation will grow”, she evaluates. “Besides the investments we have made, the Brazilian market’s own advance will be much bigger than the French and the European ones. The bet in the country also comes as a consequence of the baggage accumulated in the local market. “We have known Brazil for 20 years and we have a history of success here,” she says.

The executive refers to the arrival of the group in the country in 2001, when it acquired 51% of the then Caixa Seguros, and thus guaranteed exclusivity in the exploitation of the bank’s channel for all branches. With the expiration of the 20-year agreement, Caixa decided to open a bidding process to auction the distribution through the bank’s branch. The strategy was central to the state-owned institution’s plans to go public with its insurance arm, which occurred in April 2021.

With the restructuring, Caixa Seguridade formed new joint ventures, but with higher participation rates, between 60% and 75%. At the time, CNP was left with life, credit life, pension plans and consortiums. Tokio Marine took over the housing and residential branches, while Icatu won the capitalization auction and Tempo was left with assistance. Caixa’s holding company closed partnerships with brokerages, Willis, for large risks, Alper, in the case of health and dental, and MDS, which won the right to explore the banking channel for auto.

Baccar exalts the partnership between CNP and Caixa as “a success story for both sides. According to the CEO of the Brazilian branch, the group’s revenue when it arrived in the country in 2001 reached R$ 300 million. Two decades later, CNP shows revenues of R$ 35 billion, which makes it the fourth largest Brazilian insurance group, according to data from Susep, the industry regulator.

The chief executive explains that she sees “plenty of room to grow at the Caixa branch”. According to Baccar, “the bank is a historical partner and the CNP’s largest foreigner in the world. The acquisition of the federal bank’s shares in joint ventures, however, opens new opportunities for the group, which will have more flexibility to enter into partnerships. “Our first lever is to continue working on the relationship with Caixa, but now we can also implement a multi-partnership model, similar to what we have just implemented in Italy.”

The strategy includes setting up a distribution network for insurance products with other financial institutions, as well as platforms and fintechs. “We have entered a new phase in Brazil. The recent acquisitions were made to have what we call a ‘chassis’ for CNP to act autonomously within its own vehicle.”

The group already has a partnership with the Post Office in the commercialization of dental insurance and capitalization. Besides, it counts on the support of more than 200 administrators for the sale of “consórcios” (coop-payment plans). Another front is to expand its activities with insurance brokers. “At Previsul we already work with the broker model. It is a channel with great potential and we will further strengthen this relationship.

The focus on digital will also be a strategy. CNP and Caixa are partners in Youse, one of the largest digital insurers in the country. “We are in the middle of transforming the B2C [direct-to-customer] model to B2B2C [selling through partnerships], which will open up opportunities to brokers, platforms and others,” he says.

 

 

 

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