Swiss Insurer Zurich Financial Services almost doubled its Initial Public Offering-related premiums in Brazil last year and is optimistic about its growth prospects, the company’s chief executive said Thursday.
“The financial line, which would be inclusive of IPOs, is our fastest growing line in Brazil today,” said Paul Hopkins, Zurich’s Global CEO of the Americas, on a telephone interview from Davos during the World Economic Forum (WEF).
Zurich Financial Services is Europe’s fourth-largest insurer by market value.
Hopkins said the company’s business in Brazil grew 88 percent in 2009 to $176 million compared with $98 million in 2008.
Demand for IPO-related coverage and the general insurance business should increase in Brazil and the rest of Latin America because they were not as hard hit by the global recession as other countries and should recover faster, Hopkins said. Companies buy IPO insurance to protect themselves from potential lawsuits over claims of allegedly false information in a prospectus.
EMERGING MIDDLE CLASS
Zurich also plans to invest in the general insurance market to keep growing at double digits in the region, Hopkins said. That means investing in emerging middle class markets, particularly in Brazil.
“From a strategic standpoint, Zurich has identified Latin America as one of our high growth target regions, both in the short time and medium term, as compared perhaps to other regions that have huge population growth,” he said.
The company gets 3 percent to 4 percent of its $38 billion in general insurance premiums from Latin America. It has operations in Brazil, Mexico, Bolivia, Chile, Venezuela and Argentina. Hopkins said that growth would come organically and with new acquisitions.
Hopkins said Zurich also wanted to make its name known in 2010 in the personal insurance market in Brazil, which is dominated by Banco do Brasil, Itau-Unibanco and Bradesco.
To that end, he said, Zurich is considering sponsoring local sports teams and advertising in local media to become a household name. Last November, Zurich gained control of local insurer Minas Brasil.
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