Mutua Madrileña and CaixaBank culminate the sale of 50% of SegurCaixa Adeslas and materialise their bancassurance strategic agreement

Strategic Alliance between Mutua Madrileña and "la Caixa"

• The respective Chairmen of Mutua Madrileña and "la Caixa", Ignacio Garralda and Isidro Fainé, formalised the closing of the operation this morning after receiving all the pertinent authorisations.
• The operation includes an agreement for the exclusive distribution on an indefinite basis of the SegurCaixa Adeslas products (Healthcare, Home, Motor and the other the non-life products) through the more than 5,200 branches of "la Caixa", the largest network in the country.
• The purchase of the stake in SegurCaixa Adeslas and the commercial agreement with CaixaBank involved an investment of 1,075 million Euros for Mutua Madrileña.
• Mutua Madrileña takes over 2nd position in the Non-Life insurance ranking and is now 1st in the Healthcare segment with income from premiums that will rise to 3,300 million Euros next year when SegurCaixa Adeslas is totally integrated.
• For CaixaBank, which maintains a stake of 49.9% in SegurCaixa Adeslas, this operation will help to preserve its solid commitment to the development of the Non-Life insurance activity.
• At the last Annual General Meeting of the company it was agreed to change the name of the company from VidaCaixa Adeslas to SegurCaixa Adeslas.

Mutua Madrileña has closed the acquisition of 50% of SegurCaixa Adeslas, the Non-Life insurance company of the "la Caixa" Group which includes the Healthcare business from Adeslas, as well as a commercial agreement for the exclusive distribution on an indefinite basis of the products of the new company, SegurCaixa Adeslas, through the retail branch network of "la Caixa" and its other retail channels.

The operation, agreed to and announced on 14th January, was signed this morning by the respective Chairmen of "la Caixa" and Mutua Madrileña, Isidro Fainé and Ignacio Garralda, once all the necessary administrative authorisations had been obtained from both the Dirección General de Seguros y Fondos de Pensiones (DGSFP) [Directorate General of Insurance and Pension Funds] and the Comisión Nacional de la Competencia (CNC) [The National Competition Commission].

The acquisition of 50% of SegurCaixa Adeslas, which includes the bancassurance agreement with CaixaBank, involved a total investment of 1,075 million Euros and gives the Mutua Madrileña control of the company. Of the amount paid, approximately half represents the current business valuation of SegurCaixa Adeslas, while the other half basically represents the future business the marketing of the company's products will generate through the more than 5,200 branch offices of "la Caixa" (the largest network in the country).

The new Executive Chairman of SegurCaixa Adeslas, with the casting vote in the Board of Directors, will be Juan Hormaechea, the present Managing Director of the Insurance Area of Mutua Madrileña, while the Managing Director of the new company will be Javier Murillo, the present Executive Assistant General Manager of VidaCaixa Grupo.

The new Board of Directors of SegurCaixa Adeslas, which will hold its first board meeting on 22nd July, will be formed by six representatives from Mutua Madrileña and six from CaixaBank. Apart from Juan Hormaechea as Executive Chairman, and Tomás Muniesa as Vice Chairman, the other Members of the Board will be Juan Antonio Alcaraz, Mario Berenguer, José María Cantero, Gonzalo Gortázar, Carmen Gimeno, Ernesto Mestre, Javier Mira, Javier Murillo, Flavia Rodríguez-Ponga and Mirenchu Villa.

The controlling position of Mutua Madrileña in SegurCaixa Adeslas means that as of today it can be consolidated in its accounts through global integration, which means that next year its income from premiums will be increased to 3,300 million Euros.
The partners of SegurCaixa Adeslas, Mutua Madrileña and "la Caixa" Group, will shortly update the Strategic Plan of the new company in order to set up the main lines of action for its growth over the next three years.

A strategic alliance

For Ignacio Garralda, Chairman of Mutua Madrileña, "the acquisition of 50% of SegurCaixa Adeslas and the distribution alliance with CaixaBank is enshrined in the diversification strategy as much geographically as in channels and products set out in the Mutua Madrileña Strategic Plan 2009-2011, which also considered taking advantage of opportunities to grow inorganically to accelerate the development of the company".

In fact, with this operation Mutua Madrileña now has 56.6% of its business outside Madrid, as against 30% before, thereby significantly increasing its position in high interest areas like Catalonia, Levante and Andalucia, while increasing its specific weight in both Castillas and Galicia. At the same time, it gains in capacity to reinforce its policy of profit return to its members.

For his part, Isidro Fainé, Chairman of CaixaBank and "la Caixa", stated that "the agreement with Mutua Madrileña contributes to the intensification of insurance strategies in both companies, rounding off in the benefit of its present and future customers who will be able to have access to the best services and products at competitive prices". He added after the agreement that, "both companies will analyse future possibilities of collaborative operations in the financial products and services environment, which will provide new opportunities of cooperation". CaixaBank maintains its solid commitment to the complementary social welfare market in which it is leader through VidaCaixa Grupo.

New leader in healthcare insurance

With this acquisition Mutua Madrileña leads the healthcare ranking in Spain, given that the first position held up to now by Adeslas is reinforced by the addition of Aresa, thereby reaching 25% of market share in healthcare insurance and more than 3 million customers.

On the other hand, Mutua Madrileña rises to second position in the non-life insurance ranking in Spain from the seventh place it had, with an overall market share of 10% and it is now also the fourth insurance group in the country including its life business.

High solvency

Mutua Madrileña paid for the operation with its own resources, keeping debt at zero and solvency high, the highest in the insurance sector in Spain and in Europe. In this regard, Mutua Madrileña's non-life solvency ratio stands at 1,985%, almost 20 times the minimum demanded by Law.

Grupo Mutua Madrileña has a portfolio of 2.4 million policyholders and its income from premiums in 2010 came to 1,357 million Euros. It sells insurances for cars, motorcycles, legal defence, accidents and illnesses, healthcare, life, death, breakdown assistance, home multi-risk, general civil liability, investment and pension funds.

CaixaBank holds tenth place by stock capitalisation in the Euro zone. Its Chairman is Isidro Fainé and its Vice-Chairman and Chief Executive Officer is Juan María Nin. It has more than 5,200 branch offices, the most extensive network of the Spanish financial market, 10.5 million customers, with a non performing loans ratio of 3.95% with a cover of 65% and a total banking volume of 429,947 million Euros. The reference shareholder of the company is "la Caixa", with 81.1% of its capital and it is quoted on the continuous market in the Spanish Stock Exchange.

SegurCaixa Adeslas is the non-life insurance company whose partners are Mutua Madrileña and CaixaBank. It has more than 4 million policyholders and its income from premiums in 2010 rose to 1,714 million Euros, taking the Adeslas business into account during the whole of 2010. SegurCaixa Adeslas operates in the Healthcare segment that took in 1,390 million Euros in pro forma premiums in 2010 and had a 24% market share; Home insurance had more than 713,000 policies in 2010; Motor insurance had 256,000 policies and the company is also present in the other non-life insurance segments.

At the last Annual General Meeting of the company held on 30th June, it was agreed to change the name of the company, VidaCaixa Adeslas, to its new denomination, SegurCaixa Adeslas, given that the agreement between CaixaBank and Mutua Madrileña is confined to non-life insurance.

VidaCaixa Grupo, S.A. is the Insurance Group of "la Caixa". It is integrated in CaixaBank, which is composed of the following companies: 100% of VidaCaixa, S.A., leading entity in complementary social welfare in Spain, with a volume of managed funds in life insurance and pension plans of 33,000 million Euros; 49.9% of SegurCaixa Adeslas, S.A, keeping its vocation of development and growth in non-life segments, and 100% of AgenCaixa, S.A., Insurance Agency. Ricard Fornesa is the Chairman of VidaCaixa Grupo, Tomás Muniesa is the Chief Executive Officer and Mario Berenguer is the Managing Director.

VidaCaixa Grupo closed 2010 with a 24% rise in premiums and contributions, reaching 6,100 million Euros and its net profit came to 249 million Euros, 19.5% more than in 2009.

Mutua Madrileña had an excellent evolution last year in spite of the behaviour of the markets and the difficult macroeconomic environment. Its income from premiums increased by 5% and its net profit was 3%. Up to March 2011, new policy growth rose by 22% and income from premiums jumped by 6.1%. In the motor insurance line alone, premiums rose by 3.5% against an average fall of 2.2% in the sector. For its part, Mutuactivos, the fund manager, became the leading manager outside banks and savings banks in terms of funds managed due to a better behaviour than the rest of the market.