(Adds details, CEO comments)
PARIS Feb 20 France's largest life insurer CNP said on Thursday it aims to maintain its position as one of the leading players in Brazil after reporting an 8.3 percent rise in 2013 net profit that was boosted by strong demand in Latin America and a recovering Italian market.
Low interest rates in Europe continued to weigh on the insurer's earnings, but the diversification strategy helped tailor new high-margin business for the company.
CNP now derives around 25 percent of its premium income outside France, with the largest footprint in Brazil and Italy.
In France, its home market, premium income fell 1.8 percent to 21.1 billion euros. In Europe, underlying premium income surged 50.7 percent on an upturn in Italy from a weak 2012.
"We have a very strong recovery in activity in Italy after a year that had been very, very bad," said Antoine Lissowski, chief financial officer.
Premiums rose 4.9 percent in Brazil, where the growing middle income class boosted demand for retirement packages and personal risk contracts.
CNP's results in Latin America were nevertheless pressured by depreciation of Brazil's real by 14 percent on average versus the euro in 2013, as the U.S. Federal Reserve tapering of its bond buying programme hit emerging market currencies.
"Brazil is characterized by high social mobility, so our aim is to remain one of the largest insurance players in Brazil," Frederic Lavenir, Chief Executive Officer, told journalists after the results.
CNP Assurances is currently the fifth biggest insurer in Brazil.
Shares in CNP Assurances were little changed, up 0.48 percent on the day, but investor remain concerned about the progress of talks with key shareholder BPCE over the future of a partnership with the retail bank which expires in 2016.
If no deal can be reached renewing the agreement, CNP would lose the ability to exclusively distribute life insurance products through networks of BPCE. Revenue resulting from the partnership rose 7.3 percent in 2013, accounting for 36 percent of CNP total premium income in France.
Lavenir said he was confident a long-term partnership could be established after 2016 and that CNP was working on possible options for a new agreement.
"There is no risk of destabilisation," Lavenir said.