BTG to Start Insurance Business in Four Latin American Nations

By Javiera Quiroga and Cristiane Lucchesi | April 11, 2014

Grupo BTG Pactual SA, the Brazilian lender controlled by billionaire Andre Esteves, plans to start an insurance business in Chile, Peru, Colombia and Mexico.

The first step will be to enter Chile’s annuity market, said Alejandro Montero, chief executive officer at BTG Pactual Chile, in an interview in Santiago. The company will have capital of about $100 million, and the plan is to reach $1 billion in assets in a couple of years, according to Montero.

“We will start in Chile because it is the most mature market,” Montero said, adding that the next step for the Sao Paulo-based company would be moving into Peru or Mexico. “Our plan is to create a Pacific Alliance company,” he said, referring to the Latin American trade bloc that includes the four nations.

BTG is expanding outside Brazil to diversify its revenue and become a regional power. Annuity sales in Chile grew almost 45 percent last year to $1.73 billion, according to the nation’s insurance regulator, Superintendencia de Valores y Seguros. New York-based MetLife Inc. is the biggest insurer in Chile based on total premiums for 2013, followed by Santiago-based Chilena Consolidada Seguros Generales SA and Cia de Seguros de Vida Consorcio Nacional de Seguros SA.

BTG, which announced the acquisition of Santiago-based Celfin Capital SA in February 2012, expects to open a bank in Chile with $150 million in capital in August. The new insurance business will be run through a separate unit, Montero said.

Mexico Broker-Dealer

The bank opened a Mexico broker-dealer in January, and said in June 2012 that it would buy Bolsa y Renta SA, Colombia’s biggest brokerage by trading volume.

“We want to have local banks to provide local-currency- denominated loans to clients and compete with local lenders,” Roberto Sallouti, BTG’s chief operating officer, said in December. The bank’s goal is to expand to other Latin American countries all the products and lines of business it has in Brazil, including asset management, private equity and wealth management, Sallouti said.

In Chile, the new company will start by using other brokerages to sell its annuities, said Montero, adding that in the future it could become an insurance broker-dealer and offer other types of insurance. BTG named Jaime Maluk CEO for the bank’s annuity business in Chile. Maluk was previously an investment manager at Santiago-based Soc. De Asesorias e Inversiones Cruz del Sur Ltda, which was acquired by Santiago- based Grupo Security SA in March 2013.

Approvals have already been requested from the Brazilian central bank and Chile’s Superintendencia de Valores y Seguros. Once both are obtained, the license should be ready in about eight months, according to Montero, who expects to enter the Chilean annuity market by the fourth quarter of this year.

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