After Dutch insurance company Aegon (NYSE: AEG) bought a 50% stake in Mongeral, the Brazilian insurer will be looking to add its new partner to its local branding but will not be giving up its old distribution partnerships in the market, Mongeral CEO Helder Molina told BNamericas.
"We intend not to lose Mongeral because I think the Mongeral name is an asset for us," he said. "We've been in the market for 174 years but we'd like to add Aegon to our name to transmit solidity and strength to the public."
Another pending issue for Mongeral was what it would do with its distribution and other local business partnerships, which it has used to build market presence after going private in April 2004, spinning off from the finance ministry's social security and insurance agency.
One such partnership is with Icatu Hartford, the joint venture between Brazilian holding company Icatu and US financial services company The Hartford (NYSE: HIG). Since 2005, Mongeral has distributed private pension plans for the group.
"We're going to be continuing that [partnership with Icatu Hartford] just like [we will with] the products we have by Unibanco [NYSE: UBB]," Molina said, adding the local bank also supplies cash for loans to Mongeral clients.
Perhaps the most striking of Mongeral's announcements after the partnership was its intent to reach the top five in terms of market share in the life and pension market within five years.
"That's the target for both shareholders that put pressure on me now," the executive said.
However, Molina declined to provide concrete targets on the market share the company will need to hit its goal or elaborate on which companies Mongeral might be able to best over this timeframe.
In March, Mongeral set 2008 targets of boosting new sales 32% and revenues 15%. Molina set his five-year annual growth targets at 25% and 15-20% respectively.
Overall, insurance premiums and VGBL contributions increased 17.3% in the first eight months and are predicted to grow 16-18% for the year, according to several analysts.
Mongeral has 550 employees, which Molina sees increasing in line with the company's growth, but adding foreign employees from Aegon's operations elsewhere is not in the plans.
"I think the people from overseas can come over to help us," he said. "Also our people can go to there to learn, but the idea is not to add any people from outside."
Before the purchase, Aegon had operations in Brazil through life reinsurer Transamerica Reinsurance, which is also present in Mexico and Chile.
"Three years ago, we started with Transamerica Re with [certain] reinsurance business, and at that time both companies started thinking what we could do together, instead of just doing reinsurance," he said, mentioning that for the last 12 months the companies had been examining the current partnership.
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