Safra is in the market looking for interested parties in Alfa Seguros. Almost three years after the announcement of the transaction of just over R$ 1 billion by the financial conglomerate of the family of Aloysio de Andrade Faria (1920-2020), the insurance company is no longer part of the plans of the bank led by David Safra.

NeoFeed has learned that Safra is seeking a value 15 times the operating profit of this business segment. The transaction is being conducted by the bank's own team.

According to the bank's balance sheet, in the first half of this year the operating result was R$ 20 million and the financial result was R$ 5 million.

This general insurance area has R$1.2 billion in assets and is equivalent to about 5% of the business. The life and pension segment, with R$30.5 billion in assets, accounts for practically the entirety of the segment's balance sheet at Safra.

According to market sources consulted by NeoFeed , Safra is finding it difficult to sell Alfa's insurance operation, which is mainly focused on automobiles, due to the risk assumed in recent years.

The insurance company has always preferred to operate in niche markets – a profile consistent with both Aloysio Faria's bank and Safra – rather than face competition through mass marketing.

However, in order to gain market share, Alfa adopted an aggressive pricing strategy, which increased the risk of the portfolio due to the growth in claims.

“That’s how it works to gain market share, but it takes time to recover margins,” says an industry professional who asked to remain anonymous. According to him, Alfa’s operating margin is below 5%.

An insurance market executive said that even the financial situation isn't good. He said the portfolio needs to be cleaned up to improve results. The problem: reduced valuation .

"We've seen and analyzed it, but it certainly won't be the case that we'll buy this operation," says the executive.

Earlier this year, the bank brought its technical areas together under one umbrella and a new brand: “Alfa Seguros – a Safra company”.

The idea was to invest in technology to provide insurance brokers with intelligent pricing tools and the ability to compete for clients with other large market groups.

Contacted for comment, Safra did not respond to the interview request by the time this report was published.