Several key deals in 2014 suggest that Chinese insurers will increase their appetite to look for growth opportunities outside their home market.
2014 saw China’s Fosun International Ltd buy an 80% stake in Portugal’s Caixa Geral de Depositos insurance unit for around USD1.4bn, while China Re, the country’s largest reinsurer, gained permission from Lloyd’s for Syndicate 2088 to be a standalone reinsurance entity from 1 January 2015. Anecdotal evidence also suggests that Australia may be another market on the radar of the Chinese after a number of enquiries about opportunities in the country.
As markets reach greater maturity, it is inevitable that businesses will seek opportunities to grow beyond their domestic market – either organically or through merger and acquisition. A key advantage is that these types of joint ventures offer the ability to learn about new markets and product lines in a controlled way, and to cross-fertilise that expertise back to the domestic market.