[AJ News DB]
China's Anbang Insurance Group has offered some three million US dollars to acquire the South Korean life insurance unit of Europe's financial group Allianz in a deal that could change the picture of the domestic insurance industry.
The price, disclosed through China's social media WeChat, came a day after Anbang agreed to purchase a 100 percent stake in Allianz's operation in South Korea. The deal has yet to be approved by the Financial Services Commission, a state financial watchdog.
Anbang, led by its chairman Wu Xiaohui, has aggressively acquired overseas assets, focusing on real estate and insurance, but it withdrew a 14$ billion bid to take over US hotel operator Starwood last week.
The Chinese group bought a controlling stake in South Korea’s Tongyang Life Insurance for 1.13 trillion won last year.
An insurance company source said that Anbang may come aggressively to increase its presence in South Korea following the acquisition of two insurers. "This means there will be an inevitable shakeup in the domestic life insurance market."
Allianz Life Insurance Korea is the 11th largest life insurer in South Korea with its assets estimated at 16.65 trillion won at the end of last year. Tongyang Life is ranked eighth with its assets standing at 22.5 trillion won.
It was not clear whether the Chinese group will run Tongyang and Allianz Life Korea separately. If combined, the new entity will become South Korea's fifth largest insurance company.
The price proposed by Anbang surprised many South Korean market watchers who had expected a far higher payment.
Allianz has divested chunks of its multi-billion euro portfolio of old insurance policies in international markets. New European capital rules make it more capital-intensive for insurers to hold closed life insurance business on their books, encouraging consolidation.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
