HSBC Life Ltd, a fully-owned life insurance subsidiary of the Hongkong and Shanghai Banking Corp yesterday said it had agreed to sell its Taiwanese division to Allianz Taiwan Life Insurance Co (安聯人壽) for US$18 million in cash.
The agreement came as part of a deal between the banking unit of HSBC Holdings PLC and Allianz SE Singapore Branch, whereby the British banking group would significantly lower stakes in markets across Asia in line with the company’s business strategy, HSBC said in a statement.
Under the sale and purchase agreement, HSBC Life Taiwan would sell its assets and liabilities — except its statutory deposits, estimated to be worth US$10 million — to Allianz Taiwan, the statement said.
The deal, which is subject to regulatory approvals, is expected to be completed in the first half of next year, it said.
As of June 30, HSBC Life Taiwan owned 27,000 insurance policies with premiums valued at NT$836 million, while gross premiums at Allianz Taiwan total NT$19.45 billion, Allianz said in a separate statement.
Allianz Taiwan, the local branch of the German insurance giant, is a major supplier of unit-linked insurance policies.
“The [deal] presents a unique opportunity for Allianz Taiwan to strengthen its business here and the company aims to maintain its leadership position in the market,” company president and chief executive Chris James said in the statement.
In addition, Hongkong and Shanghai Banking Corp and Allianz Singapore inked a 10-year exclusive bancassurance pact under which HSBC banking branches would distribute Allianz life insurance products in Taiwan, Indonesia, Malaysia, China, Australia, Sri Lanka, Brunei and the Philippines, the companies said.
Allianz will pay Hongkong and Shanghai Banking Corp US$100.5 million in cash for the distribution arrangements, according to the companies.
Bancassurance is a major distribution channel for Allianz life insurance in Asia, accounting for 40 percent of gross premiums last year, Allianz said.
“Allianz and HSBC have agreed on one of the most important bancassurance deals in Asia,” David Fried, regional head of Allianz Asia Pacific, said yesterday.
The agreement will allow Allianz to expand its bancassurance distribution reach to an extra segment of retail banking customers in major growth markets across the Asia Pacific, he said.
The total value attributed to HSBC Life Taiwan and the business opportunity linked to the bancassurance operations is estimated at US$128.5 million, HSBC said.