Zurich said the acquisition would be immediately accretive to Zurich’s earnings per share.

The insurer will have access to 5,600 bank branches and an additional 36 million customers in five South American countries: Brazil, Mexico, Chile, Argentina and Uruguay.

In 2010, Santander’s Latin America business had $1.9 billion of gross written premiums. While the bulk of that—68 percent—is life products, the book contains 30 percent in general insurance, primarily homeowners insurance, said Zurich’s Kevin Hogan, chief executive officer of Global Life during a conference call with financial analysts.

In 2010, Santander’s Latin American insurance operations delivered a net profit of $328 million.

Zurich said the deal would make the company the 6^th largest non-life insurer in the region, increasing its market share in the region to 3 percent. It also makes the company the 3^rd largest life insurer. The company will be the 4^th largest insurer overall in Latin America.

The region, Zurich noted, has a young and growing population of 590 million people and low penetration of financial services.

“We are excited by the growth opportunities in the Latin America insurance market and we are excited to be working with a leading insurance franchise,” said Martin Senn, CEO of Zurich during the conference call. He added that working together over the long term, the companies together can grow the business more significantly than if they continued to work independently.

“With this alliance, Banco Santander customers will benefit from a broader, more innovative range of insurance products, managed by a global leader,” said Javier Marin, Santander’s senior executive vice president and head of Global Private Banking, Asset Management and Insurance in a statement. “The agreement will allow us to grow the insurance business more rapidly by combining the strengths of each partner.”

Santander noted that Zurich’s operations in the countries it will be doing business in stands at $670 million in life and $1.4 billion in non-life policies.

The insurance operations will be based out of Madrid, the companies said.

Mr. Hogan said the two companies businesses will remain separate, but will see a consolidation in backroom operations in the future.