Anbang Insurance Group Co (安邦保險集團), which walked away from a bid to acquire Starwood Hotels & Resorts Worldwide Inc last week, has agreed to buy Allianz SE’s operations in South Korea.
The Chinese insurer will purchase Allianz Life Insurance Korea and Allianz Global Investors Korea, according to a joint statement yesterday that did not disclose the value of the deal.
The sale by the Munich-based insurance company comes after Allianz CEO Oliver Baete put the life insurance unit in South Korea under review as part of a push to focus on the most profitable businesses and release capital from less profitable ones.
The deal is Anbang’s second involving a South Korean insurer and marks a refocus on its core business after a string of high-profile real-estate acquisitions.
Anbang bought a controlling stake in South Korea’s Tongyang Life Insurance Co for 1.13 trillion won (US$977 million) last year. In November, it agreed to buy HRG Group Inc’s Fidelity & Guaranty Life for about US$1.6 billion to expand in the US and earlier last year it won approval to purchase Dutch insurer Vivat. In 2014, it acquired Antwerp, Belgium-based insurer Fidea.
Allianz expects to book a “low two-digit million-euro to mid three-digit million euro” charge once the deal closes following regulatory approval, spokesman Thomas Atkins said by telephone from Munich.
Allianz took a 244 million euro (US$277 million) loss on the South Korean life and health insurance unit last year on business written in the past. In the fourth quarter, Allianz wrote down 171 million euros, wiping out all of the life goodwill it had for its Asian operations. Most of that was for the South Korean life unit.
Insurers in Europe are grappling with stricter regulatory capital requirements, low interest rates that hurt their investment income and subdued prices in some of their markets.
Still, Allianz is seeking to achieve annual earnings per share growth of 5 percent on average from this year to 2018. It is also targeting a return on equity of 13 percent, adjusted to exclude unrealized capital gains on bonds and other items, by 2018.
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