Credit: Shutterstock photoThe Travelers Companies, Inc.TRV , in association with J. Malucelli, recently completed the buyout of a majority stake in Cardinal Compañía de Seguros, a Colombian start-up surety provider. The acquired entity will now be known as J. Malucelli Travelers and will continue to operate from its headquarter in Bogotá.
The deal was announced first in Dec 2014. Travelers acquired Cardinal Compañía de Seguros along with its joint venture partner J. Malucelli. Travelers holds 49.5% ownership in J. Malucelli. The latest deal is expected to further strengthen the joint venture between Travelers and J. Malucelli.
Moreover, the transaction will help the company capitalize on the market opportunities in Columbia, thereby enhancing its surety platform. The deal will also help Travelers to enhance its net written premium volume.
Travelers has always considered mergers and acquisitions as a judicious measure to grow inorganically. We expect the surety business of the company to post better numbers moving ahead on account of its joint venture with J.Malucelli, as the latter occupies almost 30% of the Brazilian Surety market. The acquisition also bears testimony to Travelers' prudent investment strategy, wherein it strives to expand in the attractive and growing market place outside the United States.
Travelers currently sports a Zacks Rank #1 (Strong Buy). Investors interested in the property and casualty insurance space can consider Hallmark Financial Services Inc. HALL , ACE Limited ACE and American Financial Group Inc. AFG . While Hallmark Financial has the same Zacks Rank as Travelers, both ACE and American Financial hold a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
