According to a research by GlobalData, Chubb's purchase of a greater share in China's Huatai Insurance Group will strengthen the global giant's position in the area.
Chubb's proposal to grow its share in Huatai from 47.3% to 83.2% received approval from the China Banking and Insurance Regulatory Commission (CBIRC) last month. GlobalData claims that the action will enable Chubb to expand the market share of its life insurance business in the Asia-Pacific area and gain access to Huatai's 19 million customers and network of 400 branches and 23,000 agents, which are dispersed across 20 of China's 31 provinces.
Once the merger is finalised, Chubb and Huatai's combined market share in China (0.18% and 0.14% in 2021, respectively) will dramatically increase, moving Chubb up from 17th place among foreign insurers active in China.
According to Shabbir Ansari, senior insurance analyst at GlobalData, "The Huatai merger will provide Chubb access to life insurance market in China, as it solely operated in property and liability sector prior to the acquisition." "China is expected to increase at a compound annual growth rate of 6.56% between 2021-26," according to an estimate. "China is the second-largest life insurance market globally, in terms of premiums, after the US."
The Chubb acquisition of Cigna's accident and health and life insurance companies in six Asia-Pacific markets on July 1 was followed by the Huatai transaction. South Korea, Taiwan, New Zealand, Thailand, Hong Kong, and Indonesia are among these markets. Chubb's life insurance premium for the third quarter of 2022 has doubled as a result of the Cigna agreement.
According to Ansari, the APAC region makes up roughly 60% of Chubb's life insurance business, which is biassed in that direction. "The Huatai purchase will raise Chubb's share from China, which accounted for 18.6% of Chubb's revenue in 2021, and further solidify its position in the region."
Chubb's regional development into both personal and commercial lines will be supported by Huatai's comprehensive business portfolio, which includes P&C and life insurance.
“The addition of Huatai Insurance will boost Chubb’s retail business and support in achieving product, customer, and geographical diversification,” Ansari said. “A fast-growing affluent population and the aging demography in China will support Chubb to expand its business into life insurance and asset management services.”
Huatai Insurance's addition will strengthen Chubb's retail division and aid in achieving geographic, client, and product diversification, according to Ansari. The elderly Chinese population and a rapidly expanding affluent population will help Chubb build its asset management and life insurance businesses.