Aviva plc ("Aviva"), the international insurance and investment group, announces that it has concluded a bancassurance agreement with Caja de Ahorros de Murcia ("Cajamurcia").
Aviva plc ("Aviva"), the international insurance and investment group, announces that it has concluded a bancassurance agreement with Caja de Ahorros de Murcia ("Cajamurcia"). This new alliance sees Aviva further strengthen its leadership position in the Spanish life insurance and pensions market, where it has ranked among the top three for the past five years, and make full use of its extensive experience in bancassurance.
Through its network of 413 branches, Cajamurcia will be exclusive distributor of the products of Caja Murcia Vida y Pensiones SA ("Caja Murcia Vida"), the new life insurance and pensions company owned jointly by Aviva and Caja Murcia. Aviva will control the management of the company, consolidating its business at the group level.
Cajamurcia will receive an initial cash payment of up to €112.5 million. The final price may increase by as much as €275 million, with possible supplementary payments in years five and 10, depending on the future development of the agreement.
With the incorporation of the Cajamurcia distribution network and client base, Aviva's bancassurance network in Spain will expand to more than 4,600 branches, with access to 10 million potential customers, reinforcing Aviva's position as the second largest retail banking network in Spain. The bancassurance channel accounted for more than 72% of new business premiums in 2006 in the Spanish life insurance market.
Cajamurcia is the leading financial institution in the Murcia region, where it has a market share of around 33% in terms of customer deposits. This new agreement perfectly complements Aviva's other partnerships in Spain, strengthening the insurer's position in the east of the country, one of the fastest growing regions. Cajamurcia has an aggressive expansion plan to increase its distribution network to 500 branches over the next three years, which will complement the ambitious expansion plans of Aviva's other bancassurance partners in Spain.
Tidjane Thiam, executive director of Aviva Europe, made the following comments about the agreement: "Our agreement with Cajamurcia will further consolidate Aviva's position in the Spanish bancassurance market. Aviva's experience, both nationally and internationally, combined with Cajamurcia's distribution capacity, offers an excellent opportunity to create value for all stakeholders. Our bancassurance business continues to grow and already represents 30% of our sales in the life and pensions sector worldwide. As a recognised leader in this field, we have become the preferred partner of many banking institutions throughout Europe and Asia. We're still on the lookout for opportunities to extend our bancassurance business as part of our multi-channel business model, leveraging our experience in both new markets and those in which we're already present."
Carlos Egea Krauel, CEO of Cajamurcia, commented: "This agreement will allow both parties to make the most of our respective competitive advantages. Cajamurcia will be able to offer customers high quality products in a key business area from our strategic perspective."
The agreement is subject to approval by the relevant regulatory authorities.
-ends-
Notes to editors:
Aviva
Aviva is Europe's leading provider of life insurance and pensions, with strong positions in other markets around the world. Based on gross premiums at 31 December 2005, Aviva was the world's fifth-largest insurance group. Aviva's principal business activities are: long-term savings products, fund management and general insurance. At 31 December 2006, Aviva had turnover of £41.5 billion and £364 billion of assets under management worldwide.
Aviva in Spain
Aviva has been active in the Spanish insurance market for more than 114 years and has a solid nationwide presence through its network of 275 financial advisers and more than 45 branches. Aviva has also been present in the bancassurance channel since 2000, when it acquired 50% of the life and pensions business of Bancaja, Aseval, subsequently acquiring 50% of Unicorp Vida, Bia Galicia and Caja España Vida, and 25% of the life insurance and pensions branch of Caja Granada.
Cajamurcia
At 31 December 2006, Cajamurcia was among the top 20 Spanish savings banks based on volume of assets, with around €16.2 billion. With an efficiency ratio of 37% in 2006, Cajamurcia is Spain's leading savings bank in terms of efficiency and one of the few medium-sized institutions with an "A+" credit rating (Fitch). Cajamurcia has an ambitious strategic plan for the next 3 years, which includes expansion of its distribution network beyond the Murcia region. Cajamurcia currently has more than 1 million customers and a distribution network of 413 branches, 39% of which are outside the bank's region of origin, with a solid presence in the Valencia, Albacete and Madrid regions.
In 2006, Cajamurcia sold life insurance premiums worth €113 million and recorded €35 million in pension contributions.