First Origin acquires Hong Kong Life Insurance for HK$7.1b

[HONG KONG] First Origin International Ltd, a Hong Kong-based investment firm, has agreed to acquire Hong Kong Life Insurance Ltd for HK$7.1 billion (S$1.27 billion), said two of the owners of the Hong Kong insurer in the latest insurance deal in the territory.

The unlisted insurance firm's owners - five Hong Kong-based financial institutions including Chong Hing Insurance Co Ltd, a unit of Chong Hing Bank Ltd - have agreed to sell their respective equity stakes to First Origin.

First Origin mainly focuses on investments in financial and technology sectors in Asia, one of the owners, Chong Hing Bank, said in a statement to the Hong Kong stock exchange late on Monday.

Hong Kong Life Insurance is one of the last remaining independent life businesses in the financial centre, and ranked 10th in terms of new business annual premium among life insurers in the city in the third quarter of 2016.

Last year, China's Thaihot Group, a relatively new entrant to Hong Kong financial circles, agreed to buy Dah Sing Financial's life insurance unit for US$1.4 billion in Hong Kong's most expensive insurance M&A.

In another deal that closed last year, China's JD Capital bought Ageas' Hong Kong insurance unit for US$1.4 billion.

Hong Kong is a developed life insurance market, with a life and health insurance premium-to-GDP ratio of 13.4 per cent in 2015, the second-highest in Asia, according to Swiss Re.

Still, the market offers strong growth, with Swiss Re forecasting premiums to grow 9.2 per cent in 2016, making it attractive to new entrants.

Hong Kong Life Insurance was founded in 2001 by OCBC Wing Hang Bank, Asia Insurance Co, Shanghai Commercial Bank, Chong Hing Bank and Wing Lung Bank. OCBC Wing Hang Bank owns a 33 per cent stake while the others own about 16.7 per cent each.

Hong Kong Life sells insurance through 180 outlets using branch networks of Chong Hing Bank, OCBC Wing Hang, Shanghai Commercial and Wing Lung Bank.

The statement on Monday said the banks would now enter into a product distribution agreement with the new owner of Hong Kong Life after the closure of the transaction, which is subject to regulatory approvals.

REUTERS