Aviva plc, the international savings, investments and insurance group, announces that it has entered into a long term bancassurance partnership with Spanish savings bank, Caja de Ahorros de Murcia.
Aviva plc ("Aviva"), the international savings, investments and insurance group, announces that it has entered into a long term bancassurance partnership with Spanish savings bank, Caja de Ahorros de Murcia ("Cajamurcia"). This new partnership will enhance Aviva's leadership position in the Spanish life market where it has ranked in the top three in terms of gross written premiums for the last five years and leverages Aviva's extensive bancassurance expertise.
Cajamurcia will provide exclusive access to its network of 413 branches to Cajamurcia Vida y Pensiones SA ("Cajamurcia Vida"), the newly created life insurance company jointly owned by Aviva and Cajamurcia, to sell life insurance and pension products. Aviva will have management control over Cajamurcia Vida and will consolidate its business at a group level.
The consideration will be €112.5 million in cash. Further consideration may be payable up to a maximum of an additional €275 million dependent on the performance of the partnership.
The Cajamurcia network and customer base will bring Aviva's total bancassurance network to more than 4,600 branches, providing access to more than 10 million potential customers, thus strengthening its position as the second largest banking distribution network in Spain. The bancassurance channel accounted for over 72% of 2006 new business premiums in the Spanish life market.
Cajamurcia is the leading financial institution in Murcia where it has a 33% market share in deposits. The partnership provides excellent geographic fit and strengthens Aviva's position in Levante, one of the fastest growing areas of Spain. Cajamurcia has expansion plans to increase its branch network to up to 500 branches over the next three years and this will complement the growth expected from Aviva's other bancassurance partners.
Tidjane Thiam, group executive director, Aviva Europe, said: "Our partnership with Cajamurcia will further strengthen Aviva's position in Spanish bancassurance. Aviva's expertise, both internationally and in Spain, combined with Cajamurcia's distribution capabilities present an excellent opportunity to realise value for all stakeholders.
"Our bancassurance business continues to go from strength to strength and now accounts for 30%1 of Aviva's worldwide life and pension sales. As a recognised leader in this field, we've become the partner of choice for banks across Europe. We continue to seek opportunities to extend our bancassurance business as part of our multi-distribution model, applying our expertise in new and existing markets."
Carlos Egea Krauel, chief executive officer of Cajamurcia, said: "This agreement will allow both parties to deploy their competitive advantages. Cajamurcia will be able to offer high quality and value added products in a key strategic business for us. Aviva, the European leader in life and pensions, has chosen Cajamurcia because of its commercial efficiency and international rating; Cajamurcia's potential to become a key player in the Spanish Mediterranean Arc; and because of its imminent development in Madrid, where it expects to open 50 new branches."
The transaction is subject to regulatory approvals.
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1Measured in terms of PVNBP.
Enquiries:
Media
Hayley Stimpson
director of external affairs
+44 (0)20 7662 7544
Sue Winston
head of group media relations
+44 (0)20 7662 8221
Analysts
Charles Barrows
investor relations director
+44 (0)20 7662 8115
Amanda Wilbraham
senior manager investor relations
+44 (0)20 7662 2111
Notes to editors:
About Aviva
Aviva is the leading provider of life and pensions in Europe with substantial positions in other markets around the world, making it the world's fifth largest insurance group based on gross worldwide premiums at 31 December 2005. Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of £41.5 billion and assets under management of £364 billion at 31 December 2006
Aviva Spain
Aviva has been operating in the Spanish insurance market for over 114 years, and has nationwide coverage through a network of more than 275 financial advisers and over 45 branches. Additionally, Aviva is present in the bancassurance market through the acquisition of 50% of Bancaja's long-term savings business, Aseval, in 2000 and subsequent agreements to acquire 25% of Caja Granada life and pensions agency, and 50% of Unicorp Vida, Bia Galicia, and Caja España Vida, the life and pensions operations of Unicaja, Caixa Galicia and Caja España respectively.
About Cajamurcia
As of December 2006, Cajamurcia ranks in the top-20 Spanish savings banks by assets with Eur 16.2bn. With a cost-income ratio of 37% in 2006, Cajamurcia is the leading saving bank in terms of efficiency in Spain and one of the few medium-sized entities with an "A+" credit rating. (Fitch). Cajamurcia is working on an ambitious three-year strategic plan to further expand its network beyond Murcia. Currently, Cajamurcia has a client base of over 1 million individuals and a network of 413 branches, 39% of them outside its home region, including a significant presence in Comunidad Valenciana, Albacete, Almería and Madrid.