A previously-announced joint venture that puts UK insurance giant Aviva together with Chinese internet giant Tencent Holdings, with the involvement of private equity backer Hillhouse Capital, has received the approval of Hong Kong’s insurance regulator, the companies have announced.
As a result, the project, which aims to enable Hong Kong residents to be able to buy insurance products online, is set to begin operating “during the first half of 2018”, according to a statement issued by Aviva on Tuesday.
The agreement between Aviva, Hillhouse and Tencent was unveiled last January. It sees Hillhouse and Tencent acquiring a combined 60% stake in Aviva Life Insurance Co Ltd, the Hong Kong operation of London-headquartered, FTSE 100-component Aviva.
Aviva has been operating in Hong Kong since 2002, according to the company, and altogether has a presence in seven Asian markets: in addition to Hong Kong, these include Singapore, China, Indonesia, Vietnam, Taiwan and India.
Online Chinese insurers in focus
Online insurance companies have been attracting the attention – and financial backing – of Asian investors recently, although, as reported here in November, the payback has yet to materialise for most.
In September, the closely-watched initial public offering of Shanghai-based, Alibaba founder Jack Ma-backed ZhongAn Online Property & Casualty Insurance Co saw the shares priced at the top of their expected range (HK$69), then leap still higher as soon as they began to trade. They climbed as high as HK$97.80, in October, but currently are below their IPO level, at HK$62.50.
The attraction of the Chinese online insurers is the potential size of the relatively under-insured Chinese market, coupled with the idea that the online channel will be able to undercut more expensive, traditional distribution channels, such as those involving commission-based brokers.