November 15, 2013 / 8:52 PM / 4 years ago

Colombia insurance market to keep growing fast, says newcomer Axa

* Axa bought 51 pct of Colombia’s No. 4 insurer

* Colombia insurance penetration low, potential high -CEO

* Axa pursuing strategy of expansion in high-growth markets

By Peter Murphy

BOGOTA, Nov 15 (Reuters) - France’s Axa said its arrival in Colombia after buying 51 percent of the country’s No. 4 insurer, Colpatria, this week comes in time to capture years more rapid growth as economic expansion boosts demand for insurance.

Axa revealed on Monday that it had bought the majority stake in the insurance division of Grupo Mercantil Colpatria for 251 million euros ($338.2 million). Colpatria has 7 percent of a roughly 8 billion euro insurance market in Colombia.

“It’s the right time to enter this market,” said Laurent Granier, Axa CEO for the Mediterranean region and Latin America.

Though demand is still relatively low for insurance products in the Andean nation, the market’s potential is strong, Granier said, with average annual growth of 12 percent in the last five years, while Colpatria grew at an even faster 18 percent.

“What we expect in the coming years is to maintain high growth by expanding the range of products and ... using our know-how and strengthening our presence on the Internet,” Granier told Reuters at Colpatria’s Bogota headquarters, Torre Colpatria, the nation’s tallest building.

Axa’s entry to Colombia was one of its two major acquisitions this year. The other was its purchase of 50 percent of Chinese insurer Tian Ping for the equivalent of 485 million euros, a bet on the prospects for auto insurance in China.

Granier said Axa was seeking growth in part by expanding into some of the world’s fastest-growing markets.

The company is also taking its first steps into the Brazilian market through corporate insurance and has applied for licenses to offer a wider range of insurance products there, Granier said.

$1 = 0.7421 euros Reporting by Peter Murphy; editing by Andrew Hay

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