Germany-based ERGO Group is entering the Chinese P&C insurance market following a strategic investment in Taishan Property & Casualty Insurance Co.
According to a statement by the Munich Re subsidiary, the parties have signed a shareholder’s and capital increase agreement that will see ERGO obtain 24.9% of Taishan Insurance’s shares, via its subsidiary ERGO Versicherung AG.
The financial value of the transaction was not disclosed.
The deal, which is subject to approval by relevant authorities, marks a significant step by the German insurer to deepen and expand its services in the Chinese P&C market, the statement added. The signing ceremony was attended by Ling Wen, vice-governor of China’s Shandong Province, where Taishan is headquartered.
ERGO said that the move will enhance Taishan’s capabilities, as China’s financial services sector continues to open up. In May, Taishan Insurance received a BBB+ rating with stable outlook from Fitch, which, according to the news release, makes it among the top-ranked Chinese domestic insurance companies of similar type and size.
“ERGO Group’s strategic investment into Taishan Insurance is a strong entry point into China’s P&C market that also complements our existing life and health businesses in China,” said Jürgen Schmitz, chief executive of ERGO China. “Through this investment, ERGO Group has the opportunity to share our insurance expertise and global resources with Taishan Insurance and to boost our innovative capabilities and competitiveness in the Chinese market.”
Aside from its life and health businesses, ERGO China has a travel assistance and health TPA service company in the market, and it also has a big data technology partnership with Great Wall Motors.
“We are pleased to have ERGO Group become our strategic shareholder. We look forward to working closely with ERGO Group to explore new business opportunities and introduce new business models and technologies to our customers,” said Zhu Huajian, chairman of Taishan Insurance.
