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Chubb gains greater market penetration in China with Huatai deal

19th December 2022 - Author: Kane Wells

According to GlobalData, Chubb’s increased stake in Huatai Insurance Group from 47.3% to 83.2% will allow the firm to bolster its life insurance business in the Asia-Pacific region, giving access to Huatai’s 19 million customer base and a network of 400 branches and 23,000 agents, spread across 20 out of the 31 provinces in China.

ChubbChubb received regulatory approval from the China Banking and Insurance Regulatory Commission to increase its ownership in Huatai Insurance Group back in November.

GlobalData’s Insurance Database suggests that following the deal, the combined market share of Chubb and Huatai in China which accounted for 0.18% and 0.14% in 2021, respectively, will significantly improve Chubb’s ranking among foreign insurers operating in China from the 17th position in 2021.

Shabbir Ansari, Senior Insurance Analyst at GlobalData, commented, “The Huatai deal will give Chubb access to life insurance business in China, as it only operated in property and casualty business prior to the acquisition.

“China is the second largest life insurance market globally, in terms of premiums, after the US, and is forecast to grow at a compound annual growth rate (CAGR) of 6.56% over 2021-26.”

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Ansari added, “Chubb’s life insurance business is skewed towards the APAC region, which contributes nearly 60% of its life insurance business. The Huatai deal will further strengthen Chubb’s footprint in the region and increase its share from China, which accounted for 18.6% of Chubb’s business in 2021.

“The addition of Huatai Insurance will boost Chubb’s retail business and support in achieving product, customer, and geographical diversification. A fast-growing affluent population and the aging demography in China will support Chubb to expand its business into life insurance and asset management services.”

When the approval of the acquisition was first announced, Evan G. Greenberg, Chairman and Chief Executive Officer of Chubb, said, “This is the culmination of a 20-year effort. Upon the closing of the acquisition of these shares, Chubb will be the first foreign financial institution to majority-own a Chinese financial services holding company, with separate P&C, life, asset management and mutual fund subsidiaries.

“China is currently the second largest insurance market after the United States. With an aging and more affluent society comes the growing demands for insurance and asset management products and services. We take a long-term view, and I am confident Huatai will grow in time to become a meaningful contributor to our revenue and earnings in the future.”

The increased stake announcement follows Chubb’s acquisition of Cigna Accident and Health (A&H) and Life Insurance Business on the 1st of July this year.

According to GlobalData, the Cigna deal has doubled Chubb’s life insurance premium as per Q3 2022 results.

Cigna has operations in six Asian markets – South Korea, Taiwan, New Zealand, Thailand, Hong Kong, and Indonesia.

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