HSBC agrees to buy AXA Singapore for $780 million

SINGAPORE - HSBC has agreed to acquire AXA's Singapore insurance business for US$575 million (S$780 million), the banking heavyweight said on Monday (Aug 16).

HSBC Insurance (Asia-Pacific), which is an indirect wholly owned subsidiary of HSBC, has proposed to acquire 100 per cent of the issued share capital of AXA Insurance in Singapore, subject to regulatory approval.

AXA Singapore is currently the eighth-largest life insurer in Singapore by annualised new premiums. It is also the fifth-largest property and casualty (P&C) insurer and has a share of the health insurance market.

The combined business would create the seventh-largest life insurer based on annualised new premiums and fourth-largest retail health insurer based on gross premiums. This comes to about 600,000 policies in-force covering life, health and P&C, HSBC said in a statement.

HSBC said the move will help cement its aim of becoming a leading wealth and insurance manager, targeting high net worth populations in Asia.

As at Dec 31 last year, AXA Singapore had net assets of US$474 million, annualised new premiums of US$85 million and gross written premiums of US$739 million. It reported a profit before tax of US$23 million for last year.

The move comes at a time when demand for life insurance coverage has been on the rise amid the coronavirus pandemic.

According to a recent report released by the Life Insurance Association, Singapore's life insurance industry drew S$2.68 billion in weighted new business premiums for the first six months of this year, surpassing the same period in 2019 and last year.

New sales for the first half of this year surged 61 per cent from S$1.66 billion in first half of last year. This was also higher than the S$1.91 billion in new sales for the first half of 2019.

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This article was first published in The Straits Times. Permission required for reproduction.