AXA Group to buy Chinese partners’ 50% stake in insurance JV for $662m

Photo: Reuters

France’s AXA Group has entered into an agreement to acquire Chinese partners’ 50 per cent stake in insurance joint venture, AXA Tianping Property & Casualty Insurance Company Ltd, for about $662 million (RMB 4.6 billion).

The deal will make AXA the first foreign insurer to wholly own a top 20 property and casualty (P&C) insurance firm in China, it said in a statement.  According to AXA, full management control of the JV will allow it to ‘accelerate its strategy in the largest growing market in Asia’.

The transaction includes AXA buying back its Chinese partners’ stake in Shanghai-based AXA Tianping for 1.5 billion RMB in a capital reduction exercise.

As per an Asia Asset report, domestic shareholders in the company include Shanghai Yi Ke Joint Venture, Hainan Hua Ge Industrial Investment Co., Tian Mao Industrial Group Joint Stock Corporation, Hainan Luda Technology Co., and Rixingkang Biology Engineering Co.

“AXA Tianping represents a unique platform for AXA to capture fully the significant growth potential of the P&C and health markets in China. By leveraging its broad domestic presence, strong distribution capabilities, and our international brand with global Health and P&C expertise, we look forward to offering high-value products and services to our existing and potential customers in China,” AXA Chief Executive Officer Thomas Buberl said.

“The acquisition further reaffirms our conviction that our operations in China will be a key growth engine of the Group and in its preferred segments,” he added.

The Chinese P&C insurance and health insurance markets have been growing rapidly at 13 per cent per annum and 39 per cent respectively over the past 5 years. Despite continuous growth, P&C insurance penetration remains low at 1.3 per cent, while motor insurance has been the dominant product, representing 74 per cent of the market, the statement added.

AXA Tianping claims to be one of the leading companies in direct motor insurance, with motor insurance contributing 91 per cent of gross written premiums (GWP), of which 41 per cent is distributed through direct channels. The company also sells short-term health insurance products, and has developed a national footprint with 25 branches and 93 sub-branches, covering 20 provinces.

Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals, most notably from the China Banking and Insurance Regulatory Commission.

On the completion of the transaction, AXA Tianping will be fully consolidated into the AXA Group’s financial statements.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.