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HSBC said in a statement that the combined unit comprising HSBC
Life Singapore and Axa Singapore would be the seventh-largest
life insurer and the fourth-largest retail health insurer in
Singapore, with over 600,000 policies in-force covering life,
health and property and casualty insurance.
HSBC currently ranks 10th in life insurance in Singapore, and
does not have a health insurance business.
The Asia-focused bank, like its peers, is battling poor returns
from lending in a low interest rate environment and is looking
to boost customer fee income in areas such as insurance and
asset management.
It said in February it would invest $3.5 billion in its wealth
and personal banking business in Asia, which includes its
insurance operations, part of an overall investment in the
region of $6 billion.
"This transaction gives the scale and the capability to continue
to invest and grow from here," Bryce Johns, global CEO of HSBC
Life and Insurance partnerships, told Reuters in an interview on
Monday.
The deal is HSBC's largest acquisition since the $726 merger of
its Oman branch with Oman International Bank in 2012, according
to Dealogic.
AXA, which also is struggling with low interest rates, is
streamlining its business and withdrawing from areas where it
lacks scale.
HSBC will already be familiar with part of its new assets having
sold AXA its general insurance business https://www.reuters.com/article/hsbc-insurance-idUSL4E8E71N220120307
in Singapore, as well as Hong Kong and Mexico, in 2012 - a time
when the insurer was looking to bulk up in emerging markets and
the bank wanted to cut costs.
After exiting retail banking in the U.S. and France this year,
HSBC Group Chief Executive Noel Quinn said last month the bank
was looking at three or four "bolt on" acquisitions in Asia
outside China in areas including insurance and asset management.
Singapore, one of Asia's biggest offshore wealth hubs, is also a
regional base for thousands of global companies.
Last year, Singapore Life, an upstart insurer backed by
investors including buyout group TPG and insurer Sumitomo Life,
acquired the Singapore business of British insurer Aviva, as it
expands in Southeast Asia.
Axa said the deal with HSBC was subject to regulatory approvals
and would probably close by the fourth quarter. The Singapore
unit had net assets of $474 million at the end of 2020,
annualised new premiums of $85 million and gross written
premiums of $739 million.
HSBC said Axa Singapore would provide it access to a sizeable
tied-agency sales force, many leading independent financial
advisory firms, and a large pool of insurance policyholders and
corporate relationships.
(Reporting by Anshuman Daga in Singapore and Alun John in Hong
Kong, additional reporting by Scott Murdoch in Hong KongEditing
by Shri Navaratnam, Gerry Doyle, Kirsten Donovan)
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