AXA, QBE Seek HSBC P&C Businesses for $914M

NU Online News Service, March 8, 12:31 p.m. EST

AXA Group is looking to become the top provider of property and casualty insurance in Hong Kong with the purchase of a portion of HSBC’s P&C business for about $494 million.

Meanwhile, QBE Group says it is looking to buy HSBC’s Argentina Holdings and Hang Seng Bank Ltd. for about $420 million.

Should AXA receive all regulatory approvals, the company says the deal could close during the second half of the year.

QBE says its transaction is expected to close by the middle of 2012.

“Providing a combination of strong growth perspectives and high levels of profitability, this transaction marks another milestone in our strategy of accelerating profitable growth in Asia and Latin America, where our footprint in property and casualty will be significantly expanded,” says Henri de Castries, chairman and chief executive officer of AXA, in a statement.

AXA's buy includes HSBC’s P&C business in Hong Kong, Singapore and Mexico as well as a 10-year exclusive bancassurance agreement with HSBC in those countries and India, Indonesia and China.

QBE’s purchase also includes 10-year bancassurance agreements.

The agreements mean the companies will gain access to HSBC’s established distribution channels, though AXA says the businesses in Hong Kong and Singapore will also benefit from agent and broker networks. Likewise, QBE says the acquired business will benefit from agent and broker channels, but in Argentina.

The buys for QBE complements its existing focus on workers’ compensation business in Argentina and will increase penetration in the general insurance market in Hong Kong, says John Neal, CEO of global underwriting operations at QBE, in a statement.

AXA’s agreement to purchase the portion of HSBC’s P&C portfolio strengthens a relationship that currently exists, as AXA is a “preferred strategic partner” for HSBC, says de Castries.

“These [businesses] fit well with our strategic objectives of profitable growth in the fast-growing economies of Asia and Latin America,” says Frank O’Halloran, CEO of QBE Group. “They will also provide opportunities for synergies.”

Currently HSBC is the leading provider of P&C insurance to Hong Kong, with a 7 percent market share. AXA is second with a 6 percent market share, according to the company.

AXA is already the leading P&C provider in Mexico and ranks second in Singapore with 15 percent and 10 percent market shares, respectively.

HSBC now has a 2 percent market share in Singapore and a 1 percent share in Mexico.

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