In order to consolidate its foothold in Latin America, Assurant Inc. (AIZ) agreed to make $115 million worth of equity investment in Latin American services assistance provider Iké Asistencia (Iké).
Iké has major operations in Mexico and in other countries in Latin America. The first phase of the transaction that is associated with Iké’s Mexico operation has been completed by Assurant. The second phase related to Iké’s operations in other countries, is expected to close in the first quarter of 2014.
Based in Mexico, Iké Assistencia is the largest independently owned assistance business and has a large market share in Mexico. Iké generates annual revenues of over $170 million and has a huge client base of over 18 million. It primarily offers home assistance, roadside assistance, mobile, travel and other protection products.
The investment is expected to enrich the product portfolio that is offered by Assurant Solutions, the one of the key business of Assurant Inc. and will also enhance the multi-line insurer’s client base in Latin America.
With the addition of Iké, which will continue to operate as an independent services assistance provider, Assurant Solutions will be able to offer its clients a broader range of products and services.
The investment in Iké is expected to contribute modestly to Assurant Inc.’s 2014 earnings. Assurant Inc.’s solutions lines have already witnessed top-line growth due to its increasing business, both domestically and internationally, and this investment promises to drive further growth.
Assurant Inc. presently carries a Zacks Rank #3 (Hold). Some better-ranked multi-line insurers worth considering include American International Group, Inc. (AIG), CNO Financial Group, Inc. (CNO) and Prudential plc (PUK). All these stocks carry a Zacks Rank #1 (Strong Buy).
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