Hong Kong's NWS Holdings has agreed to buy FTLife Insurance for HK$21.5bn ($2.7bn) from mainland Chinese financial holding firm JD Group, in the biggest ever insurance acquisition deal in the territory, reported Reuters.
NWS, the infrastructure, logistics and transport services unit of conglomerate New World Development, expects the deal to help diversify its business and generate recurring income, it said in a statement.
The acquisition highlights the attractiveness of Hong Kong’s insurance sector, which is receiving a boost from growing wealth in the city and Chinese visitors snapping up foreign currency-denominated products.
“This transaction is a significant step towards our goal of building an immersive ecosystem of premium quality offerings to our customers and community,” said Mr Adrian Cheng, executive vice chairman and general manager of New World Development.
Unlisted Chow Tai Fook Enterprises, a family-held conglomerate best known for retail chain Chow Tai Fook Jewellery Group, is the biggest shareholder of New World Development.
Beijing-based JD Group bought FTLife for HK$10.7bn in 2016 from Belgian insurer Ageas as it sought growth through acquisitions in Hong Kong’s financial sector. The group has brokerage, mutual funds and private equity businesses.
JD Group’s exit from FTLife comes as China increases scrutiny of privately owned financial holding groups, whose sprawling business shareholding and overseas investments have raised concerns which in turn have prompted deleveraging action.
FTLife was the 12th largest individual life insurer in Hong Kong by annualised premium equivalent, with a 1.4% market share at the end of 2017, according to a September Fitch Ratings report on the company.