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Thursday, January 21, 2010
Today's News Headlines
* HSBC to start selling insurance, pension products early this year in Chile, Colombia, Peru - Regional
* Social security deficit up 12.6% in 2009 - Brazil
* AFPs sell US$857mn in domestic equity in 2009 - Celfin - Chile
* Max Capital expects written premiums of US$50mn in region in first year - Regional
* Banorte looking to purchase more pension fund managers - Mexico
* IN BRIEF Another executive leaves CL Financial - Trinidad & Tobago
* IN BRIEF Feller affirms MetLife unit at AA - Chile
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* HSBC to start selling insurance, pension products early this year in Chile, Colombia, Peru - Regional
HSBC (NYSE: HBC) will in March or April begin selling pension, life and other insurance products through its banking branches in Chile, Colombia and Peru, HSBC Latin America CEO Emilson Alonso told BNamericas.
"We will use our broad existing network, and in those countries where we do not have these insurance products, we'll work with strategic partners that can provide us with these policies so we can start distributing them," he said, adding that in the case of Chile the bank will offer voluntary pension plans, locally known as APV.
Alonso said the planned move is the first step towards HSBC taking a more active role in the aforementioned countries' insurance markets.
"We're always looking for purchase opportunities, but they're not easy to find," he noted.
HSBC's bancassurance activities, largely undertaken within the bank's personal financial services segment, contributed with 35% of the group's US$508mn pre-tax profit in 1H09 in Latin America, a figure that Alonso considers "fair."
"Insurance is a key area for us. The region is one of the leaders for HSBC in the world in terms of the participation of insurance in profits, and it will remain this way," Alonso said.
"There's an opportunity here because there is demand and the chance to penetrate the market in the life and pension segments as well as in the non-life market. We'll keep investing strongly and turning the operations efficiently, bringing products from Asia and Europe to Latin America."
HSBC saw net earned insurance premiums from its Latin American operations fall 19.6% to US$724mn in last year's first half compared to the same period 2008.
The bank also has operations in Argentina, Brazil, Costa Rica, El Salvador, Honduras, Mexico, Panama, Paraguay and Uruguay, and representative offices in Guatemala, Nicaragua and Venezuela.
By Jorge Porter
Business News Americas
* Social security deficit up 12.6% in 2009 - Brazil
The deficit of INSS, Brazil's federal social security system for private sector workers, came to 42.9bn reais (US$23.9bn) last year, up 12.6% on 2008, according to the country's social security ministry.
In 2008, INSS had a deficit of 36.2bn reais, down 19.3% from 2007.
Earlier this year, the ministry had been projecting a 41bn-real deficit for 2009.
The ministry's policy secretary Helmut Schwarzer would not make any deficit predictions for this year as the figures need to first be analyzed together with the ministries of finance and planning, local press reported.
By Business News Americas staff reporters
* AFPs sell US$857mn in domestic equity in 2009 - Celfin - Chile
Chilean pension funds, the AFPs, shed US$857mn in domestic equity last year, after divesting US$758mn in 2008 and US$856mn in 2007, local financial services firm Celfin said in a report.
At the end of December, AFPs' total exposure to equity increased to 48.7% - 32.4% in foreign equity and 16.3% in domestic equity - from 46.5% at end-November - 31.3% foreign equity, 15.2% domestic.
Reversing their divestment trend, AFPs bought US$188mn in domestic equity in December alone, reflecting two large capital increases and an IPO, Celfin said.
The AFPs' new equity positions centered on wood pulp company CMPC - a capital increase to fund an acquisition in Brazil -, retail-focused investment holding Cencosud, a capital increase at shipping and ports company Vapores, and retail store Hites' IPO.
On the flipside, divestments were centered on power holding company Enersis (NYSE: ENI), retailer Ripley and non-metallic miner SQM (NYSE: SQM).
Excluding capital market transactions, the net total of AFPs' inflow/outflow in December would be zero. This reverses the outflow trend, which had lasted for more than a year, Celfin said.
Meanwhile total AFP assets under management increased by 1.1% from end-November to US$118bn at end-December. "The increase in our view mirrors an upgrade in economic expectations, coming from central bank data, and the potential for Sebastian Piñera to become Chile's next President, which is now a reality," the report reads.
Local financial services firm EuroAmérica sees more forced stock sales going foward, as AFPs have almost run out of room to invest in variable income instruments. "This could occur especially in the utilities and services sectors," the company said in a report.
Both these segments are the only ones whose current exposure at 5.4% and 3.4% of the total, respectively, is above pre-crisis levels, when they stood at 4.8% and 3.2%. According to EuroAmérica, these figures imply an additional sale of some US$708mn in the utilities sector and US$236mn in services.
"If AFPs go back to their historical investment portfolio, we would see them buy US$1.06bn in the natural resources sector and almost US$235mn in the industrial segment," the report reads.
By Business News Americas staff reporters
* Max Capital expects written premiums of US$50mn in region in first year - Regional
Specialty insurer and reinsurer Max Capital Group (Nasdaq: MXGL) expects its new Latin American operations to write premiums of about US$50mn this year, the company said in its yearly letter to shareholders.
In December, Max Capital announced it would start reinsurance operations in the region, with initial offices in Rio de Janeiro, Brazil and Bogotá, Colombia.
In Brazil, Max intends to act as an admitted reinsurer operating through Lloyd's Brazilian representative office, the company said at the time, adding that initial lines in the region would include property, catastrophe, aviation, casualty, marine and surety.
The company is also interested in Ecuador, Panama, Peru, Chile and Argentina, according to the original announcement.
Max said in the letter that its global P&C written premiums totaled approximately US$1.33bn in 2009.
By Business News Americas staff reporters
* Banorte looking to purchase more pension fund managers - Mexico
Mexico's Grupo Financiero Banorte is not done purchasing private pension fund managers (Afores), according to a company executive.
"We have an aggressive plan for growth in the sector, so if new opportunities arise to acquire other [pension] books, we will," Banorte's director of long term savings, Fernando Solís Soberón, was quoted as saying by paper Excelsior.
The group's pension manager, Afore Banorte-Generali, acquired Afore Argos, IXE Afore and Afore Ahorra Ahora in 2009.
The purchases, which were paid for with the pension unit's own earnings, brought its assets under management to 72.3bn pesos (US$5.66bn) and clients up by some 700,000 to 3.9mn, Solís said. Banorte stayed at 6th in the market in terms of assets, although it increased its share to 9% from 7%, and rose to 4th from 5th in terms of clients.
Up until last year the company had focused on organic growth, which will remain a focus, as acquisitions depend on companies offering to sell, he said.
The company will not give the price of the acquisitions in order to leave itself negotiating room for future deals.
By Business News Americas staff reporters
* IN BRIEF Another executive leaves CL Financial - Trinidad & Tobago
Michael Carballo, CFO of Trinidad & Tobago-based financial group CL Financial, which was rescued by the country's government in January 2009, has resigned effective the end of January, local press reported the company as saying in a statement.
Carballo, who will remain on the company's board, will be replaced by Winston Millett, who will assume his duties immediately, CL Financial said.
The news comes on the heels of CL Financial's announcement that CEO Steve Bideshi, who led the company since July 2009, had resigned and would leave the company at the end of the month.
By Business News Americas staff reporters
* IN BRIEF Feller affirms MetLife unit at AA - Chile
Chilean ratings agency Feller Rate has affirmed its ratings on the local unit of US insurer MetLife (NYSE: MET) at AA with a stable outlook, the agency said in a report.
The ratings on MetLife Chile are based on its strong market position, efficient commercial and operating structure, conservative financial profile and support from its parent, Feller Rate said.
MetLife Chile was the country's second largest insurance player as of end-September with a 10.8% market share in terms of premiums. The insurer has a highly diversified portfolio, with relevant positions in the life annuity and group life insurance segments.
To read the full report in Spanish, go to this link (http://www.bnamericas.com/reports/133869.pdf)
By Business News Americas staff reporters
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In-deph interview
* Aiming to become one of the top five foreign players in the region
Fernando Concha
Latin America CEO
RSA
Regional
http://www.bnamericas.com/interviews/insurance/Fernando_Concha_,RSA,/170884557
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Main companies covered in today's news
* Principal Financial Group Inc.
http://www.bnamericas.com/company-profile/en/Principal_Financial_Group_Inc,-Principal/170884557
* Allianz SE
http://www.bnamericas.com/company-profile/en/Allianz_SE-Allianz/170884557
* National Comercial Bank Ja. Ltd.
http://www.bnamericas.com/company-profile/en/National_Comercial_Bank_Ja,_Ltd,-NCB_Jamaica/170884557
* Caribbean Information & Credit Rating Services Limited
http://www.bnamericas.com/company-profile/en/Caribbean_Information_*_Credit_Rating_Services_Limited-CariCris/170884557
* The World Bank Group
http://www.bnamericas.com/company-profile/en/The_World_Bank_Group-World_Bank/170884557
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