European insurer AXA is a step closer to becoming the largest foreign property and casualty insurer in China after agreeing to buy half of Chinese motor insurer Tianping Auto Insurance for 3.9 billion yuan (HK$4.9 billion). AXA, headquartered in France, said yesterday it had agreed to pay 1.9 billion yuan for a 33 per cent stake in Tianping from existing shareholders and subscribe to a dedicated capital increase of 2 billion yuan to support future growth, according to a company statement. The deal is subject to the approval of the China Insurance Regulatory Commission. The purchase would help make AXA the biggest foreign property and casualty insurer in China, the company said. Shanghai-based Tianping was established in 2004 and the first mainland insurer to specialise in vehicle insurance. The insurer, which has a licence for direct sales, had a 0.83 per cent share of the property and casualty market in 2011. Net profit that year was 226 million yuan, an increase of 40 per cent from 2010, while its premium income grew by 28 per cent year on year to 3.6 billion yuan in 2011, the statement said. This acquisition provides AXA with unique direct distribution capabilities in the fast-growing P&C insurance market in China "This acquisition provides AXA with unique direct distribution capabilities in the fast-growing P&C insurance market in China," AXA's chairman and chief executive, Henri de Castries, said in the statement. "It further strengthens the profile of AXA's global P&C franchise and is another stepping stone towards our ambition to accelerate further in high-growth markets." The French insurer has been actively seeking Chinese partners to capitalise on the high-growth market. It received approval at the end of last year for ICBC-AXA Life, a life insurance joint venture with the mainland's largest lender, Industrial and Commercial Bank of China. Its property and casualty insurance unit, AXA General Insurance China, generated 339 million yuan in premium income last year. Overseas insurers have been optimistic about the growth of China's insurance market. Foreign property and casualty companies expect the market to grow an average of 20 per cent a year from 2012 to 2015, according to a survey of overseas insurers last year by accounting firm PricewaterhouseCoopers. Some foreign players even anticipated a further boost driven by access to the car insurance market. Chen Xingyu, an analyst with Phillip Securities, said AXA's purchase would help boost the company's market share in the property and casualty market. "Car insurance has the biggest growth potential in P&C market," Chen said. However, the property and casualty market would still be dominated by domestic insurers like Ping An and PICC P&C, he said, adding that the total share of foreign insurers in property and casualty was less than 2 per cent.