HSBC Life to Sell Taiwan Business to Allianz for US$18 Million
October 30, 2012 by Rebecca Ng
LONDON – HSBC Life (International) Ltd., a subsidiary of banking group HSBC Holdings plc, said it has agreed to sell its Taiwan branch to Allianz Taiwan Life Insurance Co Ltd., part of German insurer Allianz SE, for US$18 million in cash.
The transaction includes the assets and liabilities other than statutory deposits of about US$10 million, said the London-based lender in a statement.
HSBC and Allianz also formed a 10-year exclusive bancassurance distribution partnership for life insurance in Asia. Under the agreement, Allianz will further deliver its life policies to retail banking customers through HSBC in China, Indonesia, Malaysia, Australia, Sri Lanka and Taiwan, while the German insurer’s life products will be provided by its strategic partners in Brunei and the Philippines.
Allianz said it will pay US$100.5 million in cash for the right to be the exclusive life insurance provider distributed by HSBC in Taiwan, Indonesia and Malaysia.
Bancassurance is a significant distribution channel for its life insurance products in Asia, noted Allianz, which added that in 2011, around 40% of gross written premiums in life insurance came from this channel.
“Both Allianz and HSBC are global leaders with the local expertise necessary to support their focus on outstanding customer service,” said David Fried, regional chief executive officer for Allianz Asia Pacific, in a statement. Allianz also expects rising demand for life insurance products in Asia.
The total value of the Taiwan branch of HSBC Life and the opportunity for Allianz Group companies to be providers of life insurance policies distributed by HSBC Group companies in Taiwan, Indonesia and Malaysia is US$128.5 million, according to HSBC.
HSBC said the transactions are subject to regulatory approvals and are expected to be completed in the first half of 2013.
In March, HSBC and its 62%-owned Hong Kong-based subsidiary Hang Seng Bank said they would divest their general insurance businesses in Asia and Latin America in two separate deals with French insurer Axa Group and Australia-listed QBE Insurance Group Ltd. for total cash consideration of US$914 million (Best’s News Service, March 7, 2012).
Allianz SE currently has a Best’s Financial Strength Rating of A+ (Superior).
(By Rebecca Ng, Hong Kong news editor: Rebecca.Ng@ambest.com) BN-NJ-10-29-2012 0939 ET #