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HSBC agreed to buy out the other 50 percent of shares from its life insurance joint venture in mainland China in yet another milestone for foreign entry into finance on the mainland.
HSBC will become the sole owner of HSBC Life China after acquiring the shares from its Beijing-based partner National Trust for an undisclosed sum, subject to regulatory approvals including from the China Banking and Insurance Regulatory Commission.
The HSBC Life China JV was formed in 2009 and currently has a presence in nine mainland cities including Beijing, Guangzhou, Shanghai and Shenzhen. As of December 31 last year, the insurer had 1.03 billion yuan ($146 million) in registered capital.
According to Swiss Re, China’s insurance market ranks third behind the U.S. and Japan at an estimated $318 billion in premiums. But despite the sizeable scale and the relatively long presence of some foreign players, insurers from abroad hold less than 10 percent market share due to ownership restrictions and limited geographical presence.
With the recent reforms, which also included lifted ownership caps in the securities, futures and asset management industry, HSBC joins the likes of AXA and Allianz as foreign wholly-owned insurers in mainland China.
«Despite the current difficult environment engendered by the Covid-19 pandemic, we continue to take steps to implement our growth strategy,» said HSBC chief executive Noel Quinn in a statement. «This transaction supports our ambition to accelerate growth within our Asian franchise, particularly in the dynamic and fast-growing Greater Bay Area, where we fully intend to expand in all lines of businesses.»
