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China: Ping An Insurance harbours Asian expansion ambitions

Source: Asia Insurance Review | Sep 2018

China Life & Health M&A

China’s largest insurer by market value, Ping An Insurance, has evaluated buying UK-headquartered Prudential’s Asia business, Bloomberg has reported citing people familiar with the matter. Such a deal would immediately extend its reach to insurance markets from Singapore to Indonesia, bringing it into more direct competition with international brands like AIA and Manulife Financial.
A mega-acquisition like the Prudential unit would mark an abrupt departure from Ping An’s strategy of incubating various tech businesses and then spinning them off, while incorporating the technology in its main financial and insurance operations. That strategy helped Ping An supercharge growth, and won it plaudits among analysts as one of Asia’s most technologically advanced insurers. Marrying that tech prowess with an instant customer base across Asia would make Ping An a potentially huge threat.
Ping An has 23,000 research staff, 500 big-data scientists and spends billions of dollars a year on R&D. Last year, it attracted 46m new customers – almost all of them in its home market.
“An acquisition is a good strategy for Ping An to expand into other regions,” as it seeks to mitigate the risk of concentrating on its home market, said Zhongtai Securities Shanghai-based analyst Lu Yunting.
Prudential currently serves almost 15m customers in 14 markets. Its CEO Mike Wells said that the UK insurer’s Asian operations are not for sale.
Contribution to Prudential’s operating profit from the region’s markets, led by Indonesia, Hong Kong and Singapore, rose to about 42% in the first half of this year from 35% for all of last year, data compiled by Bloomberg show. A 
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