Elektra Buys Cigna’s Mexican Business

November 3, 2003

Mexico’s Grupo Elektra S.A. de C.V., one of the country’s biggest retailers, announced that it has received approval from the Ministry of Finance to purchase “a private insurance company in Mexico that will be renamed Seguros Azteca, S.A. de C.V.”

The bulletin went on to state that “Grupo Elektra acquired CIGNA Seguros, S.A. and its license to operate life, accident and health insurance. The transaction does not include any insurance portfolio in force or any liabilities.” It did not indicate the price of the transaction, or other terms and conditions.

“This is an important step for the Mexican insurance industry as Seguros Azteca will expand the market,” commented Javier Sarro, Elektra’s CEO. “In creating this new company, we will bring new premiums to the insurance sector through penetrating a market barely approached by this industry. We will offer additional quality products to our clients who have preferred our variety of products and services for over 50 years.”

The announcement noted that “insurance industry penetration in Mexico measured by total premiums as a percentage of GDP is 2.0%, one of the lowest compared to Argentina, Chile and Brazil, 3.9%, 4.0%, and 2.1% penetration, respectively; and even lower when compared to OCDE, G7 and NAFTA figures of 8.8%, 9.2%, and 8.6%, respectively.”

Elektra has appointed Alfredo Honsberg as Seguros Azteca’s CEO. He was previously CEO of Seguros Serfin Lincoln, S.A. and worked for Seguros Comercial America, S.A. de C.V. and Munich Re.

“This represents an excellent opportunity for Grupo Elektra and its financial division because of the low cost to start this venture and its potential growth going forward, Honsberg commented. “We plan to start offering policies throughout Grupo Elektra stores and Banco Azteca’s branches. Furthermore, their excellent payment collection scheme will help us position our leading insurance products and to preserve a healthy life insurance portfolio.”

“Alfredo brings valuable experience and vast knowledge from both the Mexican and international insurance industries,” Sarro stated. “We are building a highly qualified team for the company; this will prove to be the essence of Seguros Azteca’s success.”

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