Credit Agricole's insurance arm Credit Agricole Assurances (CAA) has signed an agreement with Italian bank Credito Valtellinese (CreVal) to establish a long-term exclusive life insurance partnership.
The life insurance partnership will give CAA, through its Italian subsidiary Crédit Agricole Vita (CA Vita), access to the distribution network of CreVal for all savings products and also certain protection products for up to 15 years.
As part of the deal, CAA will acquire 100% of CreVal’s life insurance business Global Assicurazioni (GA) for €80m. This will be after GA is restructured by its existing shareholders to include only the business pertained to life insurance policies sold via the CreVal network.
Credit Agricole said that to consolidate the long-term strategic partnership, CAA will acquire a minority stake of 5% in the capital of CreVal.
Additionally, the parties have also agreed to jointly evaluate, in the medium term, the feasibility of extending the partnership between Credit Agricole and CreVal to other product areas.
In such a scenario, Credit Agricole could look into the possibility to boost its stake in CreVal to up to 9.9%. As of now, CAA and CASA Group have no intentions to expand the stake beyond that threshold.
The transaction is expected to enable CAA and CreVal to further strengthen their competitive position in the life bancassurance business. This is said to be executed by tapping on the industrial know-how of CAA to develop a market-leading commercial platform and exploiting the full potential of the franchise and distribution capabilities of CreVal.
For CreVal, the start of the partnership with CAA is part of a larger project for reshaping its bancassurance operating model.
The Italian bank is looking to achieve a structural increase in overall profitability by implementing its 2018-2020 Strategic Plan with one of the pillars of it being reorganization and enhancement of its bancassurance activity.
Subject to regulatory approvals from IVASS and AGCM, the transaction is anticipated to be closed in the fourth quarter of 2018.