Ageas announces that it has concluded an agreement with China Taiping Insurance Holdings (CTIH) to subscribe to a capital increase of its wholly controlled subsidiary Taiping Reinsurance Co. Ltd. (TPRe) for a total consideration of HKD 3,100 million (around EUR 340 million). With this transaction, Ageas reinforces its strong long-term strategic partnership with China Taiping.
The participation in TPRe, one of the top Asian reinsurance companies with a strong track record and promising growth potential, allows Ageas to expand in the fast-growing Asian reinsurance market from leading positions in Hong Kong and China. Moreover, the subscription to the capital increase, which is a further step in a long history of cooperation between Ageas and CTIH, will increase the share of Non-Life activities in the Group’s business portfolio.
Since 2013, TPRe’s gross written premiums have grown annually on average by 27% resulting in EUR 1.7 billion in 2019. The company recorded only one loss-making year in the past 40 years, while its P&C combined ratio averaged 95.2% from 2013 to 2019. The company reported a solid solvency ratio of 272% (Hong Kong’s CAP 41 regime) at the end of 2019, which together with an A Stable rating (S&P | AM Best | Fitch) reflects its strong financial position.
Ageas will acquire 25% of TPRe’s enlarged share capital for a total consideration of HKD 3,100 million (around EUR 340 million), which corresponds to 1.03 times the company’s book value before the capital increase. The agreed price is subject to a compensation mechanism based on the evolution of the net asset value of the company since 31 December 2019.
The transaction is subject to regulatory approval and is expected to be closed in the last quarter of 2020. The corresponding amount will be paid in cash. The impact on the Group’s solvency position at the time of closing is estimated to be around 9 percentage points.
This sizeable transaction replaces this year’s share buy-back programme that was delayed following the recommendation of the National Bank of Belgium. It will however not impact our commitment to the 2021share buy-back programme.
Bart De Smet, CEO of Ageas said: “This transaction offers Ageas a unique opportunity to enter the Asian reinsurance market and to benefit from its strong potential. We are pleased to do so together with our long standing partner China Taiping as this further strengthens our very successful partnership. For Taiping Re the capital increase will allow it to achieve its wider growth plans.”
Wang Sidong, CEO of CTIH added: “We have a long-term strategic partnership with Ageas. This transaction further reinforces the collaboration between Taiping and Ageas, and we believe such collaboration will create synergies and support our ambition to grow our global reinsurance business especially in the European markets.”
Ageas is a listed international insurance Group with a heritage spanning almost 200 years. It offers Retail and Business customers Life and Non-Life insurance products designed to suit their specific needs, today and tomorrow. As one of Europe's larger insurance companies, Ageas concentrates its activities in Europe and Asia, which together make up the major part of the global insurance market. It operates successful insurance businesses in Belgium, the UK, France, Portugal, Turkey, China, Malaysia, India, Thailand, Vietnam, Laos, Cambodia, Singapore, and the Philippines through a combination of wholly owned subsidiaries and long term partnerships with strong financial institutions and key distributors. Ageas ranks among the market leaders in the countries in which it operates. It represents a staff force of over 45,000 people and reported annual inflows of over EUR 36 billion in 2019 (all figures at 100%).
China Taiping Insurance Holdings Company Limited is a member of the group of companies under China Taiping Insurance Group Ltd., which is a large scale insurance enterprise incorporated in the People's Republic of China (“PRC”). The principal activity of China Taiping is investment holding. The principal activities of China Taiping’s subsidiaries are the underwriting of direct life insurance business in the PRC and Hong Kong, direct property and casualty insurance business in the PRC, Hong Kong and overseas, pension and group life business, and all classes of global reinsurance business. China Taiping’s subsidiaries also carry on operations in asset management, insurance intermediary, E-commerce for insurance, financial leasing, property investment, senior living investment, securities dealing and broking business.
Taiping Reinsurance Co. Ltd (TPRe) is a company incorporated under the laws of Hong Kong with limited liability. The principal business activities of TPRe Group include non-life and life reinsurance across the world. With its head office in Hong Kong, TPRe also has operating platforms in the region and overseas, including subsidiaries in Beijing and London, a branch in Labuan, Malaysia, as well as a representative office in Japan and Macau.