AXA to pay US$662 million for full control of China joint venture, as Beijing speeds up opening before Xi-Trump meeting
- AXA Tianping Property and Casualty Insurance Company is currently the largest foreign-owned general insurer in mainland China
- Opening up of insurance sector to help China bargain when presidents Xi and Trump meet this weekend, expert says
French insurer AXA said on Tuesday it will pay 4.6 billion yuan (US$662.34 million) to buy the remaining 50 per cent stake in its Chinese joint venture that it did not already own, becoming the second foreign insurer in three days to announce plans for a wholly-owned insurance company in mainland China.
The AXA announcement follows the go-ahead German insurer Allianz received on Sunday from the China Banking and Insurance Regulatory Commission for a wholly-owned insurance holding company, to be set up in Shanghai next year.
Allianz wins approval for China’s first wholly-owned foreign insurance holding company – four years earlier than promised
The approvals are being viewed by analysts as a gesture by Beijing before a meeting between Chinese President Xi Jinping and US President Donald Trump in Argentina during the G20 summit this weekend.
“The opening up of the insurance sector is very much part of a strategy for Beijing to show it has sped up its opening process for foreign companies. This will help China bargain when presidents Xi and Trump meet later this week,” said Louis Tse Ming-kwong, director of Hong Kong-based VC Wealth Management. “The banking and securities sector will open up sooner as well.”
AXA Tianping Property and Casualty Insurance Company is currently the largest foreign-owned general insurer in mainland China and ranked 15th among all of China’s general insurers with a gross premium of €1 billion (US$1.13 billion) in 2017. The joint venture has 25 branches and 93 sub-branches, covering 20 provinces on the mainland, according to the company.
“AXA Tianping represents a unique platform for AXA to capture fully the significant growth potential of the property and casualty and health markets in China,” said Thomas Buberl, the chief executive of AXA. “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,” said Buberl.
Gordon Watson, chief executive of AXA Asia, said: “With full ownership and management control of AXA Tianping, we will further accelerate the deployment of our strategy to create a leading insurer that champions health care and mobility solutions.”