Mapfre has signed an agreement with UK insurer Direct Line Group to acquire its motor insurance subsidiaries in Italy and Germany for €550 million.

The businesses in Italy and Germany add premiums of €714 million and 1.6 million clients, and generate profits before taxes of €19.5 million, as per the latest results from 2013.

Direct Line Italy leads the Italian direct motor insurance segment, with a market share of approximately 28 per cent, producing premiums of nearly €500 million annually from its one million clients.

Direct Line Germany ranks third in the German direct motor insurance market, with an approximately 13 per cent market share. The company generates over €200 million in premiums and has close to 600,000 clients.

Direct insurance has been a high-growth segment in both countries recently; it has grown by 74 per cent and 38 per cent over the last five years in Italy and Germany respectively.

“The assets acquired in Italy and Germany are clearly a key investment for Mapfre, given that they underpin two central pillars of our global growth strategy: increasing our presence in Europe, and their alignment with our firm commitment to the digital business,” Antonio Huertas, Mapfre’s chairman and CEO, said.

The transaction will be formalised conditional upon authorisation being granted by the relevant market regulators.

Mapfre is a global insurance company present in 47 countries on the five continents. Local insurer Middlesea Insurance is a member of the Mapfre Group.