Reinsurance News

Swiss Re said to have held discussions on Anbang investment

22nd October 2018 - Author: Steve Evans

Global reinsurance firm Swiss Re has been looking at opportunities for investment in China, after a stake in Anbang Insurance is said to have been discussed with the Chinese authorities.

Swiss ReAnbang Insurance Group is described as one of the most politically connected companies in China, having been founded by state-owned enterprises in the mid-2000’s.

Today, the insurer has more than 30,000 employees and offers a range of insurance and financial products, but has been embattled after Chairman Wu Xiaohui was detained during an investigation into Anbang’s activities and fraud, leading to China’s insurance regulator taking control of the insurer in early 2018.

This hasn’t put off Swiss Re, according to Bloomberg, who cites people familiar with discussions between the Swiss headquartered reinsurance giant and Chinese authorities regarding an investment in Anbang.

Bloomberg said that Swiss Re has been “approached” regarding this potential investment, as the China looks to secure additional capital to shore up Anbang.

Stratumn, by SIA Partners

The news outlet said that Swiss Re has not decided whether to make an investment at this stage.

Chinese officials have also been testing the waters of a sale of some of Anbang’s overseas interests with Swiss Re, the article continues.

Anbang has acquired or secured large stakes in a range of foreign financial institutions over the years, including Belgian insurer Fidea Verzekeringen, Dutch insurer Vivat, South Korea’s Tongyang Life, as well as some of Allianz’s operations in South Korea.

Whether those offshore units would be attractive to Swiss Re is uncertain, the firm likely doesn’t require the additional footprint they would provide to it.

But what might be attractive is an investment into Anbang itself, given that would provide Swiss Re with a more direct route into the Chinese insurance and reinsurance market.

Chinese officials have been searching for international investors to take stakes in Anbang ever since the insurer was seized by the state, leading to discussions with major investors such as Temasek, the Singaporean sovereign fund.

Ever since the fraud investigation and arresting of Anbang’s Chairman the insurer has been propped up using state funds, but now it appears the Chinese government would like to see the insurer being taken private with the assistance of global capital.

A stake in Anbang, particularly if large enough to secure ownership, could be very attractive to an international insurance and reinsurance players (such as Swiss Re) as a way to secure a distribution and customer facing insurance platform inside China and increase access to that market.

Swiss Re and Anbang declined to comment on Bloomberg’s story.

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