Founded in 1938, Grupo Bolivar is the third largest local financial conglomerate in Colombia. The Group is a strong player in the insurance industry, with second largest market share through the Insurance Companies, and in the banking industry, with the third largest bank in Colombia, Banco Davivienda. Grupo Bolivar’s companies include strong players such as Davivienda, the Insurance Companies, Constructora Bolivar and a host of smaller entities including a mutual fund, a trust company, a stock broker and a beach resort.

The proposed investment consists of an equity investment in common shares for up to $75 million to recapitalize the Insurance Companies and restore its solvency margins to their ex-ante capitalization levels (i.e., before the elimination of non-insurance related investments).

75.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	75.0

* These investment figures are indicative

The Insurance Companies are headquartered in Bogota, Colombia and have a presence throughout the country through agents, brokers and sales representatives at the Davivienda branches.

The potential developmental, institutional and capacity building impact of the project is high. In addition to a greater transparency, which will flow from the financial reorganization, the re-capitalization proposed for the Group will help reinforce the local insurance industry in the Andean Region and help Bolivar to be better equipped to compete. Insurance companies have a disproportionately high impact on economies because they are necessarily large investors who directly affect the general economy through their operations. In order to settle claims that may arise, insurers invest excess premium income to build a portfolio of financial assets and income-producing real estate which can then be called upon to pay-off any future claims that may arise. Therefore, a vibrant insurance industry can be a reliable source of long-term capital, which is lacking in Colombia. The provision of quality insurance is therefore crucial for the development of a healthy and dynamic private sector and long-term financial markets.

IFC would play an important role through this project as it would: 1. Promote the development of the local capital markets. 2. Add significant value to Bolivar’s institutional structure by increasing the Group’s transparency. 3. Play an honest broker role. 4. Share regional knowledge and experience. 5. Cause a demonstration effect.

This project entails supporting Grupo Bolivar''s insurance operations and has been classified as a Category C project according to IFC’s Environmental and Social Review Procedure. However, the project is required to comply with IFC''s FI exclusion list for its corporate clients (i.e., the Insurance Companies shall not provide policy coverage for corporate clients which are substantively involved in these excluded activities).