October 5, 2015

Travelers makes major commitment in Brazil

"[This] marks an important step in the development of our Brazil platform and reflects our confidence in the market's long-term growth potential," said Kevin Smith, president of international insurance at Travelers, in a statement. "We will leverage Travelers' considerable strength and expertise to deliver a broader range of products and provide specialized risk management and claim services to customers in Brazil."

The Travelers acquisition comes at a sensitive time in Brazil's economy, which is in recession. As reported by England's Guardian newspaper, Brazil has seen 1 million jobs lost in the last year because of falling global economy prices and weakened domestic demand. The economy was also damaged by a major corruption scandal involving Brazil's largest company, Petrobas, and dozens of other major firms.

As a result of the transaction, Travelers now owns 95 percent of the property casualty business, with Paraná Banco, the parent company of J. Malucelli, retaining a 5 percent interest. Travelers' interest in the surety business of the J. Malucelli joint venture remains at 49.5 percent. The joint venture recently acquired a majority interest in Cardinal Compañía de Seguros, a Colombian start-up surety provider.

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