State-owned People's Insurance Company of China (PICC) is currently in negotiations to acquire or buy stakes in several insurers in Southeast Asia, with some deals expected to close before the year ends.
Xie Yiqun, PICC Group vice president, said that he expects one to two deals to be completed within the year, with several more in the next two to three years.
The insurer’s push to expand overseas is in line with China’s Belt and Road Initiative, an ambitious and wide-reaching economic program that aims to build a modern-day “Silk Road” connecting China to the rest of Asia, Europe, and Africa.
PICC is also planning to open offices and branches in several major Belt and Road trade hubs as it keeps an eye out for investment and acquisition opportunities, Xie said at the insurer’s results press briefing. The insurer’s first-half profits rose 14% year-on-year to RMB8.82 billion (US$1.33 billion).
“Insurance regulations vary from country to country,” he was quoted by Reuters. “We have a map (of target markets). Our progress in each country varies as each has a different level of openness.”
Despite Beijing exerting tighter control on outbound Chinese deals, there is an increase in M&A deals in Belt and Road countries, with 2017 investments reaching US$33 billion in mid-August, according to data from Thomson Reuters.
PICC executives have also said that it is using the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connect schemes as new investment channels, pouring in from RMB8 billion to RMB10 billion (US$1.2 billion to US$1.5 billion) for the first half of this year.
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