Actis commits $100m to create Brazilian insurance brokerage platform04/11/14

Actis today announced a commitment of $100m to create a new buy and build insurance brokerage platform in Brazil, IT’sSEG. Actis is partnering with Thomaz Menezes, former CEO of Marsh Latin America who will be a shareholder and act as CEO of the platform.

IT’sSEG has acquired three existing companies with strong brands in the market and over 20 years of experience: Torres Benefícios, a corporate benefits broker; Barela, a retail-focused benefits broker; and Raduan*, which covers both corporate and retail benefits insurance distribution. Together these businesses give the platform a reach of more than 400,000 people, with a total of approximately $400 million in annual premiums. IT’sSEG, which aims acquire additional businesses in time, is initially focusing on the benefits market for corporate, medium and small businesses, including products such as corporate employee health plans.

Chu Kong, co-Head of Actis’s Latin American activities commented: “The Brazilian insurance brokerage sector offers enormous potential for growth and consolidation, reaching US $7 billion in revenue in 2013 and growing by 8% a year in real terms. We look forward to working with Thomaz Menezes and the management team to bring insurance services to more Brazilians.”

Nick Luckock, Head of Financial Services at Actis, added: “We looked at opportunities across the markets where Actis invests and Brazil is the most attractive market to create such a platform. Low insurance penetration rates and high fragmentation in the insurance distribution market provides a clear rationale for a scale business like this.”

Thomaz Menezes, CEO and shareholder, also commented: “I am delighted to be partnering with Actis to offer a differentiated service proposition, including a full integrated back office and a service orientated business. Our aim is for IT’sSEG to become the best insurance brokering offering in Brazil, providing a range of high quality products and services to Brazilian corporate and retail customers. Actis is the ideal partner for such a vision, bringing with it admirable expertise in the financial services sector.”

Actis has a proven track record in the Brazilian financial services sector and buy and build financial infrastructure platforms. In 2010, the firm invested $58million in XP Investimentos, Brazil's largest independent brokerage firm. With Actis’s backing, the company has more than doubled in value, diversified into new product lines, and made five acquisitions. In 2010, it established Emerging Markets Payments Holdings (EMPH); today EMPH has the broadest footprint of any payments company in Africa, contracting with 130 banks and operating in 40 countries across the region. Earlier this year, Actis also set up Credit Services Holdings (CSH), a buy-and-build credit services business in Africa. * The Raduan transaction is pending regulatory approval