"We are very pleased with this partnership which is key in securing access to the Catalonian market, one of the wealthiest regions of Spain,” said Aegon CEO Alex Wynaendts.
- Companies sign exclusive life insurance, pension and health distribution deal
- Agreement will further strengthen Aegon’s position in Spain
Aegon has signed a life insurance, pension and health joint venture agreement with savings bank Caixa Terrassa, further strengthening the Group’s position in the Spanish market. The partnership gives Aegon access to the north-eastern region of Catalonia, one of Spain’s wealthiest and more dynamic areas with a population of more than seven million. Caixa Terrassa serves approximately 500,000 customers and is one of the largest savings banks in Catalonia. Last year, Caixa Terrassa’s life insurance, pension and health unit Caixa Terrassa Vida wrote almost EUR 215 million in gross premiums. As a result of this new partnership, Aegon will become the sixth largest life insurer in Spain1).
As part of the joint venture agreement, Aegon will pay EUR 190 million for a 50% stake in Caixa Terrassa Vida. Based on performance of the joint venture, Aegon may pay an additional consideration to Caixa Terrassa. Under the joint venture agreement, Caixa Terrassa will exclusively distribute life insurance, pension and health products through its network of almost 300 bank branches. Aegon will fully integrate Caixa Terrassa Vida’s back office into its own operations.
Aegon’s partnership with Caixa Terrassa is part of a broader strategy designed to expand the Group’s international presence and target more of its financial resources toward businesses with attractive growth and higher returns. Aegon will finance the acquisition out of existing excess capital, and expects the transaction to be marginally accretive to earnings.
"We are very pleased with this partnership which is key in securing access to the Catalonian market, one of the wealthiest regions of Spain,” said Aegon CEO Alex Wynaendts. “Adding Caixa Terrassa Vida to our franchise fits very well with our strategy of strengthening our position in the Spanish life insurance market. We look forward to a long and successful cooperation with Caixa Terrassa."
Aegon already has distribution partnerships in place with four other regional savings banks across Spain. With this latest transaction, Aegon products and services will be distributed through a total of 2,200 bank branches around the country.
Aegon’s joint venture agreement with Caixa Terrassa is expected to close during the fourth quarter of 2008 and is subject to approval by the Spanish and European regulatory authorities.
1) Source: ICEA, based on consolidated numbers (on a 100% basis)
Aegon first entered the Spanish market in 1980 when it bought Seguros Galicia. Since then, the Group’s operations have expanded significantly. In Spain, some 70 percent of life insurance policies are sold through the country’s banks. For this reason, Spain in recent years has been an important part of Aegon’s efforts to expand its web of bank distribution partnerships around the world. Today, Aegon has partnerships in place with five of Spain’s largest savings banks: Caja de Ahorros del Mediterráneo, Caja Navarra, Caja de Badajoz, Caja Cantabria and Caixa Terrassa. Strong economic growth, changing demographics and the recent focus on bancassurance have transformed Spain into one of Aegon’s fastest-growing businesses.
Founded in 1877, Caixa Terrassa is the eighth oldest savings bank in Spain. It has assets under management of approximately EUR 20 billion and a loan portfolio of some EUR 9 billion. Caixa Terrassa’s insurance division was founded in 1988 and manages 220,000 policies. Caixa Terrassa has nearly 300 branches, mostly in Catalonia, and employs 1,600 people.