CNP Assurances has completed its discussions with Caixa Seguridade concerning their new exclusive distribution agreement in the Caixa Econômica Federal network in Brazil and signed an amendment to the framework agreement dated 29 August 2018. The main changes introduced in the amendment are as follows:

  • CNP Assurances will benefit from a 5-year extension of the exclusive distribution agreement, which will now run until 13 February 2046 (versus the original expiry date of 13 February 2041).
  • CNP Assurances will retain higher economic rights (51.75% versus 40%) in the business lines included in the 29 August 2018 agreement until December 2020 (private pension plans, life insurance and consumer credit life insurance).
  • CNP Assurances will continue to write all the other business lines through its subsidiary Caixa Seguros Holding until the current operating agreement expires on 14 February 2021 and none of these businesses will be discontinued ahead of that date.
  • CNP Assurances will pay, at a date now set to December 2020, an amount that has been increased from R$4.65 billion to R$7.0 billion . The amendment also introduces incentive mechanisms linked to outperformance criteria in terms of volumes and margins over the first five years, in the form of additional payments, capped at R$0.8 billion (Group share) in present value terms as of 31 December 2020. The incremental impact of this amendment on the Group’s SCR coverage ratio is estimated at around 3 percentage points.

CNP Assurances confirms that the expected internal rate of return of the investment in relation to this new agreement remains over 15%, which will contribute to long-term value creation within the CNP Assurances group.

The agreement is subject to various conditions precedent, including its approval by the relevant supervisory and competition authorities. Subject to these approvals being obtained, the transaction is expected to close at the end of December 2020.

"We are delighted to be signing this amendment, which extends the August 2018 agreement by providing an even longer term vision of our partnership with Caixa Econômica Federal" said Antoine Lissowski, CNP Assurances’ Chief Executive Officer.
"This announcement is also an opportunity to congratulate our Brazilian teams thanks to whom our joint subsidiary now ranks as Brazil’s third largest insurance company."