BBVA has reached an agreement with Allianz for creating a bancassurance alliance in order to develop the business of non-life insurance in Spain, excluding the health branch. BBVA Seguros will transmit half plus one of the shares of the 'joint venture' to be created for this purpose to Allianz for an initial fixed price of approximately 277 million euros, so the German insurer will control the business. Also, there will be a variable payment of up to 100 million per objective.
The agreement contemplates creation of a newly created insurance company (‘Joint venture’), to which BBVA Seguros will contribute the assets and liabilities associated with the non-life insurance business. BBVA Seguros will transfer to the new un joint venture ’a business of about 300 million in gross premiums issued in 2019.
In addition to the fixed price, Allianz will pay, where appropriate, BBVA Seguros a variable price of up to 100 million based on the achievement of certain business objectives and certain milestones provided for in the integration plan agreed by the parties.
BBVA estimates that this transaction, subject to the approval of the regulatory authorities, will generate a positive result net of taxes of around 300 million euros and a positive impact of approximately seven basis points on the CET1 ‘fully loaded’ capital ratio, according to the initial fixed price of 277 million.
The agreement foresees that BBVA will distribute, exclusively, the insurance products of the ‘joint venture’ during a period of 15 years. Further, The Latin American business is left out, after its inclusion has been considered.
With non-life insurance premium income of 2,387 million in 2019, Allianz Seguros It is among the top three property and accident insurers in Spain. The entity changes its partner for bancassurance in Spain after having sold Santander its share in the Allianz Popular joint venture, which also included investment funds and pension plans, for 936.5 million euros.
“BBVA has key competitive advantages for the non-life insurance business such as customer insight and distribution ability through physical and digital channels. For its part, Allianz has a clear international leadership in innovation and product development capabilities in insurance, ”says Peio Belausteguigoitia, head of BBVA in Spain.
"We are delighted to have reached a long-term agreement in bancassurance in Spain with BBVA ”, underlines Iván de la Sota, Chief Transformation Officer of Allianz SE. "This agreement strengthens our position in the market and demonstrates our firm commitment to continue growing in Spain, even more in these complex times. Together with BBVA, we want to develop new innovative insurance solutions that are simple and attractive to customers. ”
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