The Travelers Companies, Inc. announced on Monday that the company has completed its acquisition of a 43 percent interest in JMalucelli Participações em Seguros e Resseguros S.A., the market leader in the surety insurance business in Brazil with a market share in excess of 30 percent.
Travelers' investment in newly issued shares will significantly increase JMalucelli's capital level, positioning it for substantial growth in Brazil. Travelers has made an investment of approximately US$410 million and has an option to increase its interest to up to 49.9 percent within 18 months.
"This joint venture enables us to leverage our leading U.S. surety franchise to participate in the growing Brazilian market and to do so with the benefit of a local market leader," said Jay Fishman, Chairman and Chief Executive Officer. "We expect this transaction will be modestly accretive to Travelers' earnings in the first full calendar year."
"We believe that the combination of Travelers' broad insurance expertise with JMalucelli's established distribution network and extensive customer base provides us with an exceptional platform for expanding the joint venture beyond the surety business into the growing property and casualty market," said
Alan Schnitzer, Vice Chairman and head of Travelers' Financial, Professional & International Insurance business segment. "We are very enthusiastic about both the surety and the property casualty insurance opportunities."