(Photo credit: HLW.)
MAPFRE will acquire Direct Line Group’s subsidiaries in Italy and Germany for 550 million euros. The Madrid-based carrier says the deal reflects its commitment to online direct insurance while reinforcing its presence in Europe. The acquisition comes at a time when direct insurance has grown by 74 percent and 38 percent over the last five years in Italy and Germany respectively.
“The assets acquired in Italy and Germany are clearly a key investment for MAPFRE, given that they underpin two central pillars of our global growth strategy: increasing our presence in Europe, and their alignment with our firm commitment to the digital business,” comments Antonio Huertas, chairman and CEO, MAPFRE.
The businesses in Italy and Germany add premiums of 714 million euros and 1.6 million clients, and generate profits before taxes of 19.5 million euros, as per the latest results from 2013, according to a MAPFRE statement.
Direct Line Italy leads the Italian direct motor insurance segment, with a market share of approximately 28 percent, producing premiums of nearly 500 million euros annually from its one million clients.
Direct Line Germany ranks third in the German direct motor insurance market, with an approximately 13 percent market share. The company generates over 200 million euros in premiums and has close to 600,000 clients.
Aligned Multi-channel, Customer-Centric Strategy
Direct Line Group acquired both subsidiaries in Italy and Germany in 2001, and during the last 13 years both companies have diversified their distribution channels: currently direct insurance contributes 45 percent of premium, while various distribution alliances with car manufacturers and finance companies account for 32 percent, with the remaining 23 percent coming from insurance price comparison websites, according to MAPFRE. The carrier characterizes that strategy as perfectly aligned with its own multi-channel customer-centric approach.
The transaction is pending regulatory approval in the relevant markets.