Key deal to consolidate Chubb's APAC insurance business – report

Acquisition reflects heavyweight's increasing commitment to fast-growing market

Key deal to consolidate Chubb's APAC insurance business – report

Insurance News

By Gabriel Olano

Chubb’s acquisition of a larger stake in China’s Huatai Insurance Group will further consolidate the global giant’s hold in the region, a report by GlobalData said.

Last month, the China Banking and Insurance Regulatory Commission (CBIRC) approved Chubb’s plan to increase its stake in Huatai from 47.3% to 83.2%. According to GlobalData, the move will allow Chubb to further strengthen the presence of its life insurance business in the Asia-Pacific region and gain access to Huatai’s customer base of 19 million individuals and a network of 400 branches and 23,000 agents, spread across 20 out of the 31 provinces in China.

Once the deal is completed, the combined China market share of Chubb and Huatai (0.18% and 0.14% in 2021, respectively) will significantly improve and will elevate Chubb’s ranking among foreign insurers operating in China from 17th place in 2021.

“The Huatai deal will give Chubb access to life insurance business in China, as it only operated in property and casualty business prior to the acquisition,” said Shabbir Ansari, senior insurance analyst at GlobalData. “China is the second-largest life insurance market globally, in terms of premiums, after the US, and is forecast to grow at a compound annual growth rate of 6.56% over 2021-26.”

The Huatai deal came after Chubb’s acquisition of Cigna’s accident and health and life insurance businesses in six Asia-Pacific markets on July 1. These markets are South Korea, Taiwan, New Zealand, Thailand, Hong Kong, and Indonesia. The Cigna deal has doubled Chubb’s life insurance premium for the third quarter of 2022.

“Chubb’s life insurance business is skewed towards the APAC region, which contributes nearly 60% of its life insurance business,” Ansari said. “The Huatai deal will further strengthen Chubb’s footprint in the region and increase its share from China, which accounted for 18.6% of Chubb’s business in 2021.”

Huatai has a diverse business portfolio, encompassing P&C and life insurance, which will support Chubb’s expansion into both personal and commercial lines in the region.

“The addition of Huatai Insurance will boost Chubb’s retail business and support in achieving product, customer, and geographical diversification,” Ansari said. “A fast-growing affluent population and the aging demography in China will support Chubb to expand its business into life insurance and asset management services.”

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