Chubb said that it will expand its stake in China-based Huatai Insurance Group by up to 22.4%, as it looks to further tap into the rapidly growing Chinese insurance market.
According to a report by Reuters, Chubb, which already holds over 26% of Huatai, will increase its stake in two stages – first by 15.1% then followed by an additional 7.1% stake, based on the completion of the first contingent. Combined, it will cost around RMB10.8 billion (US$1.53 billion).
Earlier this year, Chubb increased its stake in Huatai to 26.2%. This is the first time the China Banking and Insurance Regulatory Commission (CBIRC) has given approval to such a transaction, where a domestic Chinese financial services company was transformed into a ‘Sino-foreign joint venture, the report said.
The move is part of Beijing’s agenda to open up its insurance and finance sectors to foreign investment by relaxing foreign ownership restrictions.
“We are committed to supporting Huatai as a long-term strategic shareholder and we have great confidence in the long-term potential of the Chinese insurance market,” said Evan Greenberg, CEO of Chubb.
Chubb will purchase Huatai shares from Chinese chemicals maker Inner Mongolia Junzheng Energy and Chemical Group Co Ltd, and one of its wholly-owned subsidiaries, the report said.
