Fitch Ratings has provided an assessment of Allianz’s intention to acquire a majority stake in Singapore’s Income Insurance.
Manuel Arrive, director of insurance at Fitch Ratings, remarked that this proposed acquisition would significantly enhance Allianz’s presence in Asia, a critical growth region for the company.
Arrive noted that the transaction would elevate Allianz to the fourth largest composite insurer in Asia, from its current ninth position, and make it a leading player in Singapore’s property and casualty (P&C) sector.
He pointed out that the acquisition is consistent with Allianz’s strategic goals of achieving growth through acquisitions in the P&C sector rather than life and health (L&H) insurance.
“At group level, the size of the transaction is small and Allianz’s AA IFS rating is unaffected,” he added. “Specifically, it is neutral to the group’s capitalisation, company profile, and financial performance, all of which are already very strong and key rating strengths.”
Robert Mazzuoli, also a director of insurance at Fitch, reiterated that the acquisition aligns with Allianz’s strategy to pursue inorganic growth in the P&C insurance sector.
“The acquisition is fully in-line with Allianz’s strategic objectives to grow inorganically in P&C rather than L&H and to achieve market leading positions in regions they are already active in,” he said.
Kanishka de Silva, senior director of insurance at Fitch, said Income Insurance is poised to gain from Allianz’s global expertise and the potential synergies between the two entities.
“The acquisition will strengthen the Allianz/Income Insurance combined market position in Singapore. It will further strengthen Income Insurance’s #1 position in the fragmented non-life space, while we expect the life space, in which Income Insurance ranks #6, to continue to be dominated by the existing players,” he said.
He highlighted that Singapore’s insurance industry benefits from stable macroeconomic conditions, strong regulatory frameworks, and favourable demographics. He also pointed out that Southeast Asia continues to attract global insurers due to its faster growth compared to more mature markets.
“Southeast Asia continues to show faster growth compared to some of the more mature markets in the region and we expect it to continue attracting global insurers. Japan’s Sumitomo Life Insurance Company (IFS Rating: A+/Stable) completed the acquisition of Singapore Life Holdings Pte Ltd (SLH), the holding company of Singapore Life (IFS: A+/Stable) on 18 March 2024,” he said.
