HSBC Insurance (Asia-Pacific) to acquire AXA Singapore for $575m

HSBC has signed an all-cash deal worth $575 million through its fully-owned subsidiary — HSBC Insurance (Asia-Pacific) to acquire AXA Insurance Pte Limited (AXA Singapore), the insurance operations of AXA in Singapore.

AXA Singapore, which is a composite insurer, offers life and savings, health and property and casualty (P&C) solutions to nearly a million customers.

Currently, AXA Singapore is said to be the eighth largest life insurer in Singapore on the basis of annualized new premiums, and the fifth largest P&C insurer.

For the year ended 31 December 2020, the company had $474 million in net assets, $85 million in annualized new premiums, and gross written premiums of $739m.

AXA has taken up the sale as part of its business simplification efforts. In June, the French insurance giant had signed a €140 million worth deal to sell its Malaysian insurance business to Generali.

Gordon Watson — AXA Asia and Africa CEO said: “In line with the Group’s strategy, we are focusing on our core markets where we have the size, presence in the right business segments and a strong potential to grow.

“We have in Asia a unique set of assets across established and high potential markets where we are deploying our vision, notably in health and protection, bringing high value products and services to our customers.”

HSBC Insurance (Asia-Pacific) to acquire AXA Singapore for $575m. Photo courtesy of HSBC Group.

On the other hand, HSBC said that AXA Singapore fits well with its existing HSBC Insurance (Singapore) Pte Ltd’s HSBC Life Singapore business.

The banking and financial services group said that both the businesses have complementary products across the range of insurance solutions and distribution channels.

Through AXA Singapore, HSBC expects to get access to a sizeable tied-agency sales force, various independent financial advisory firms, and a huge pool of insurance policyholders and corporate relationships.

HSBC Life Singapore and AXA Singapore, which are intended to be merged, will become the seventh largest life insurer on the basis of annualized new premiums and the fourth largest retail health insurer in terms of gross premiums with more than 600,000 policies in-force covering life, health and P&C. HSBC’s claims are based on the filings of Monetary Authority of Singapore and data from Life Insurance Association of Singapore.

Noel Quinn — Group Chief Executive of HSBC Holdings plc said: “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.”

The deal, which is subject to regulatory approvals and other closing conditions, is expected to be wrapped up by Q4 2021.