Tokio Marine Seguradora SA entered into a definitive agreement to establish an insurance joint venture in São Paulo with Caixa Econômica Federal subsidiary Caixa Seguridade Participações SA.

Under the agreement, the Tokio Marine Holdings Inc. subsidiary will make a capital contribution of 1.52 billion reais to the joint venture. Tokio Marine Seguradora will own 50.01% of the joint venture's voting shares, while Caixa Seguridade will own 49.99% of the voting shares and 100% of the nonvoting shares.

The joint venture will underwrite mortgage and homeowners insurance and is expected to start operations by February 2021. The name of the joint venture and its CEO has yet to be determined.

The new insurance entity is expected to have limited impact on Tokio Marine group's consolidated business performance.

As of Jan. 6, US$1 was equivalent to 4.05 Brazilian reais.