HSBC Insurance, an indirect wholly-owned subsidiary of HSBC Holdings, has entered into an agreement to acquire 100% of the issued share capital of AXA Insurance (AXA Singapore) for US$575million. The proposed acquisition, which is subject to regulatory approval, is a key step in achieving HSBC’s ambition of becoming a leading wealth manager in Asia, by expanding its insurance and wealth franchise in Singapore. Singapore is a strategically important scale market for HSBC, and a major hub for its ASEAN wealth business, said the compay.
Currently, AXA Singapore is the eighth largest life insurer in Singapore by annualised new premiums, fifth largest property and casualty (P&C) insurer and a leading group health player. AXA Singapore had net assets of US$474 million, annualised new premiums of US$85m, gross written premiums of US$739 million and profit before tax of US$23 million for the year ended 31 December 2020.
AXA Singapore is a good fit with HSBC’s existing HSBC Insurance (Singapore), HSBC Life Singapore business. Both businesses have complementary products across the spectrum of insurance solutions and distribution channels, while AXA Singapore provides access to a sizeable tied-agency sales force, several leading independent financial advisory firms, and a large pool of insurance policyholders and corporate relationships. This combined business will not only materially scale up HSBC’s presence in the regional insurance market, it will also provide an excellent platform for future growth.
Noel Quinn, group chief executive, HSBC Holdings said: “This is an important acquisition that demonstrates our ambition to grow our Wealth business across Asia. Wealth is one of our highest growth and highest return opportunities, and plays to our strengths as an Asia-centred bank with global reach. We are acquiring a good business that fits well with our existing operations, and which strengthens our status as one of Asia’s leading wealth and insurance providers.”
Nuno Matos, chief executive, Wealth and Personal Banking, added: “This strategic investment is a key milestone for HSBC Life to materially scale up, grow and diversify our insurance and wealth business in Singapore. The proposed acquisition will immediately put us in a leading position in health and employee benefits, and accelerate our build out of a distinctive and holistic wealth and health planning business, operating beyond our branch network. Burgeoning affluent and high net worth populations in Singapore and across Southeast Asia will drive strong demand for an array of wealth, health and insurance solutions for individuals, their families and SMEs.”
Following deal completion, which is subject to regulatory approval, the intention is to merge the operations of HSBC Life Singapore and AXA Singapore, subject to further approval by the Singapore regulator and courts.
Meanwhile, in Malaysia, Italian insurance company Generali acquired AXA’s insurance businesses for about RM1,290 million. Under the agreement, Generali will acquire the 49.99% stake that AXA has in AXA Affin General Insurance and its 49% stake in AXA Affin Life Insurance. According to Generali, the acquisitions will position Generali as one of the leading insurers in the Malaysian market, creating the second property and casualty insurer by market share and entering the country’s life insurance segment. The expected completion date of the acquisition is in the second quarter of 2022.