British insurer Standard Life has agreed to sell its Hong Kong arm, Standard Life Asia, to its Chinese joint venture, Heng An Standard Life Insurance Company. The move makes Heng An the second mainland enterprise to buy a Hong Kong-based insurance company in the space of two weeks. London-listed Standard Life announced the deal on Wednesday morning and said the transaction will need approval from regulators in both Hong Kong and the mainland, which may take about 18 months. The final amount payable will be calculated on the date of completion and will be payable in cash. A fortnight ago, a mainland consortium that included Beijing-based UCF Group agreed to pay HK$7.1 billion (US$910 million) to buy the entire stakes of Hong Kong Life from five local financial firms including Asia Financial Holdings and Chong Hing Bank. The Standard Life deal marks the 10th mainland buyer to express and interest in buying a Hong Kong-based insurer since 2014, according to data from Thomson Reuters. Standard Life Asia, wholly owned by Standard Life, was established in 1999 in Hong Kong to sell life insurance and financial products through independent financial advisers and partners. The buyer, Heng An Standard Life Insurance is a 50-50 joint venture between Standard Life and Tianjin TEDA International Holding (Group). Established in 2003, it sells life insurance and other investment products in 64 Chinese cities and eight provinces, serving more than five million customers. “By leveraging its existing expertise and talents, the Hong Kong operation will become an important gateway for Heng An Standard Life into the Hong Kong insurance market,” said Alan Armitage, chief executive of Standard Life Asia. Sandy Begbie, executive lead (insurance) for China at Standard Life, said: “It makes strategic sense to bring Standard Life Asia and Heng An Standard Life together”. “Heng An Standard Life continues to go from strength to strength and, once the transaction is complete, it will be another important step for the business, allowing access to more markets,” said Zhenyu Liu, general manager of Heng An Standard Life. “It will also result in Heng An Standard Life becoming a Sino-foreign joint venture insurance company with insurance licences for serving both mainland China and Hong Kong customers.” Hong Kong insurers have more product choice and they are priced in Hong Kong dollars or US dollars, which hedge the risks of devaluation of the yuan Chan Kin Por, lawmaker Chan Kin Por, a lawmaker for the insurance sector in Hong Kong, said mainland buyers have a keen interest in buying Hong Kong-based insurance companies for the purposes of boosting future business growth. Mainland companies spent HK$48.9 billion to buy Hong Kong insurance products in the first nine months of last year, representing 37 per cent of the total. “Mainlanders came to buy these products as Hong Kong insurers have more product choice and they are priced in Hong Kong dollars or US dollars, which hedge the risks of devaluation of the yuan,” Chan said. Besides takeovers, there are also more than 10 companies wanting to apply for insurance licenses from the Hong Kong government in a market that already had 160 insurance firms. “With mainlanders coming to buy policies here, the Hong Kong insurance market has turned from one with a population of seven million to one with 1.3 billion. The future potential is huge. “The recent Beijing curb on using credit cards to buy insurance policies in Hong Kong will not have a big impact because many mainlanders have money parked in Hong Kong to make payment already,” Chan said.