Tokio Marine Holdings, Inc. has announced the execution of a definitive agreement between its subsidiary, Tokio Marine Seguradora S.A., and Caixa Seguridade Participações S.A, an insurance holding unit of Caixa Econômica Federal, to establish a joint venture insurer to underwrite mortgage and homeowners insurance.

Caixa Econômica Federal is a Brazilian state-owned bank and leading institution on the Brazilian mortgage industry, holding more than a 70% market share in the country’s mortgage loan market.

The definitive agreement between the two subsidiaries is expected to further diversify the operations of Tokio Marine Holdings through the expansion into the mortgage and homeowners sectors of the marketplace, both of which are growing. Tokio Marine Seguradora has been expanding its operations and at the same time improving its profitability and is now ranked 5th in terms of market share in the Brazilian auto market.

The establishment of the joint venture with Caixa is a continuation of Tokio Marine Group’s ambitions to expand in both mature and emerging markets through acquisitions and partnerships.

In terms of the structure of the joint venture, Caixa is set to establish a new insurance company and allocate new shares to Tokio Marine Seguradora equivalent to 50.1% of the insurer’s voting shares upon a capital contribution of approximately US$ 370 million (R$ 1.52 Bn).

The company name is yet to be determined as is the Chief Executive Officer (CEO). However, an overview of the joint venture at this stage reveals that its head office is expected to be in São Paulo, Brazil.

Original Story: Reinsurance News | Luke Gallin
Photo: Tokio Marine Seguradora
Edition: Prime Yield