AXA follows Allianz with €0.6bn China investment

French insurance group AXA is acquiring the remaining 50 percent stake in AXA Tianping Property & Casualty Insurance Company that it does not already own, for a total consideration of ¥4.6 billion (€584 million).

Through this deal, AXA wants to accelerate its growth in Asia and moreover become the first foreign insurer to own 100 percent of a P&C insurance company in China.

The announcement comes shortly after German insurance giant Allianz revealed that it has received approval from the Chinese regulator CBIRC for the preparatory establishment of an insurance holding company in the country - a move that it claims will make Allianz the first-ever wholly-owned foreign insurer in China.

AXA said it will finance its transaction through a capital reduction of AXA Tianping to buy back shares from the current domestic shareholders.

"AXA Tianping represents a unique platform for AXA to capture fully the significant growth potential of the P&C and health markets in China,” said Thomas Buberl, CEO of AXA. “By leveraging its broad domestic presence, strong distribution capabilities, and our international brand with global Health and P&C expertise, we look forward to offering high-value products and services to our existing and potential customers in China."

"This is a “first of its kind” transaction in the Chinese insurance market whereby a leading P&C insurer, with a nationwide footprint, will be fully owned by a foreign company. 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."

In 2017, AXA Tianping ranked 15th amongst China’s P&C insurers with €1 billion of gross written premiums (GWP), and is the only foreign invested company in the top 20 P&C insurers in China, according to the French insurer. AXA Tianping's national footprint include 25 branches and 93 sub-branches, covering 20 provinces which together generate over 85 percent of China’s GDP, it noted.

On the completion of the transaction, AXA Tianping will be fully consolidated into the AXA group’s financial statements.

"The transaction marks another step towards consolidating our position as the #1 foreign insurer in China and strengthening of our leadership in the Asian region," said Gordon Watson, AXA CEO Asia. "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 healthcare and mobility solutions."

"Combining AXA Tianping’s high-quality infrastructure with AXA’s global expertise in health and digital, will enable us to target selectively our preferred customer segments to create more long-term value in the motor business while capturing the rapid expansion of the health market by developing a holistic wellbeing offer," Watson added.

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