Travelers Increases Stake In Brazil Surety Insurer

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The Travelers Cos. exercised an option to increase its ownership stake in a Brazil company that it invested in two years ago from 43.4 percent to 49.5 percent.

Travelers said in November 2010 it planned to spend $370 million for a 43 percent stake in J. Malucelli Participações em Seguros e Resseguros S.A., the market leader in surety insurance in Brazil.

Travelers would not say how much it spent to expand its ownership stake in the company. Travelers increased ownership by exercising an option at a price based on the same valuation as the original investment, the company said, which would be about $52 million.

“We are very pleased with the performance of our joint venture in Brazil,” Travelers head of Financial, Professional & International Insurance business segment, Alan Schnitzer, said in a prepared statement. “The venture continues to be the market leader in the surety insurance business in Brazil, with a market share of approximately 30 percent. In addition, we are making good progress on our early efforts to expand beyond the surety business into the growing property and casualty market.”

Surety coverage generally offers a payment to an individual or business if a principal, or policyholder, doesn’t fulfill an obligation, such as terms of a contract.

Brazil is a hot market for investment. UnitedHealth Group said in October it plans to spend $4.9 billion on Brazil’s largest health care company, which is the company’s priciest acquisition in years.

In December 2011, Cigna Corp. expanded its expatriate health benefits business in Brazil, establishing a partnership with Gama Saúde, which has 20,000 doctors, hospitals and health-care professionals in Brazil.

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by Politico.com, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (businessjournalism.org, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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