Finance & Economics

HSBC acquires AXA’s Singapore insurance business

The proposed acquisition is subject to regulatory approval

HSBC

HSBC acquires AXA’s Singapore insurance business. Source: shutterstock.com

SBC Insurance (Asia-Pacific) Holdings Ltd, an indirect wholly-owned subsidiary of HSBC, has entered into an agreement to acquire 100% of the issued share capital of AXA Singapore for $575 million.

According to the press release, AXA Singapore is currently the 8th largest life insurer in Singapore by annualized new premiums and 5th largest property and casualty insurer.

AXA Singapore is considered to be a good fit with HSBC’s existing HSBC Insurance business.

Both businesses have products across the spectrum of insurance solutions and distribution channels. Meanwhile, AXA Singapore provides access to a sizeable tied-agency sales force, several independent financial advisory firms, and a large pool of insurance policyholders and corporate relationships.

The combined business would be the 7th largest life insurer (based on annualized new premiums) and 4th largest retail health insurer (based on gross premiums) with over 600,000 policies in-force covering life, health and P&C.

This is an important acquisition that demonstrates our ambition to grow our Wealth business across Asia. Wealth is one of our highest growth and highest return opportunities, and plays to our strengths as an Asia-centred bank with global reach. We are acquiring a good business that fits well with our existing operations, and which strengthens our status as one of Asia’s leading wealth and insurance providers
Noel Quinn, Group Chief Executive, HSBC Holdings plc

Following deal completion, the intention is to merge the operations of HSBC Life Singapore and AXA Singapore, subject to further approval by the Singapore regulator and courts.

The proposed acquisition will be funded from existing resources and will have a minimal impact on HSBC’s common equity tier 1 ratio. We expect the acquisition to be immediately accretive to the earnings of the Group upon completion.

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